Samsung's shares have dropped by 4.2-percent, following a new outlook of the company tied to the tech giant's leading sales industry from Morgan Stanley. More specifically, the firm lowered its target stock by 3.4-percent because of a turnaround in NAND memory prices, which had been on the rise for several quarters and are now beginning to fall. Another firm, HMC Investment & Securities, on the other hand, reportedly claims that Morgan Stanley's reported new outlook may be more reactionary than the situation calls for.
The somewhat conflicting view on Samsung shares comes down to the fact that Samsung is not the only company in that sector of the market. Meanwhile, SK Hynix shares also fell by 3.6-percent, following Morgan Stanley's report. However, HMC views Samsung as being in a better position in the market than its competitors Not only is Samsung currently experiencing a 47-percent increase in shares for the whole year, while the company is also expected to report both record shipments and income. The firm also believes that Samsung's predominant sector – namely, NAND chips for data center solid-state drives – is still going strong and that lower prices on NAND will encourage a healthy number of shipments and increased demand. Additionally, HMC points out that increase in demand for components from other areas of technology in which Samsung excels, including OLED technologies, will likely help to offset at least some decreases in its NAND sales. That's likely at least partially due to the fact that the company has a contract to supply Apple with OLED displays for its iOS devices.
With that said, the outlook may not be anything for Samsung to worry too much about. The drop in shares is, after all, much lower than the percentage dropped during the Samsung Galaxy Note 7 recall – which saw shares drop by 7-percent. This is also the lowest point for shares over the month, but not over the longer term. In the meantime, Samsung's smartphone sales are also doing well. So this turn of events may not have as profound of an impact on its overall position in the market as it may have otherwise had.