Samsung and SK Hynix Rally Surpasses Dot-Com Bubble Gains, Jefferies Says
South Korean semiconductor giants Samsung Electronics and SK Hynix have delivered extraordinary gains, with their combined rally now exceeding the surge witnessed during the dot-com bubble era, according to analysts at Jefferies.
The investment bank noted that the two chipmakers have climbed an impressive 798% from their 500-day lows as of Monday. This performance surpasses the 717% increase recorded during the height of the technology bubble, highlighting the strength of the current artificial intelligence-driven semiconductor boom.
Semiconductor Rally Still Has Room to Run
Jefferies pointed out that the latest upward move in Samsung and SK Hynix shares began in late May. Despite the substantial gains already achieved, analysts believe the rally may still have further upside potential.
The firm explained that market bubbles often extend the dominance of leading stocks, transforming them into historical outliers. Strong earnings growth and continued retail investor participation remain supportive factors for both companies.
Volatility Expected to Increase
While maintaining a constructive outlook, Jefferies cautioned that the path higher is unlikely to be smooth.
According to the firm, volatility typically rises during the later stages of powerful market rallies. As a result, investors may find it increasingly difficult to separate short-term market noise from the broader trend.
Jefferies noted that similar volatility was experienced in March and expects comparable periods of turbulence to occur several times going forward.
Buy-and-Hold May Outperform Active Trading
The investment bank also suggested that heightened volatility could reduce the effectiveness of active trading strategies.
In such environments, repeatedly attempting to buy lows and sell highs may generate weaker returns than a long-term buy-and-hold approach. Jefferies added that short-term trading decisions made during volatile periods can significantly influence investment performance over the following weeks or even months.
What Could End the Rally?
Jefferies identified several potential warning signs that investors should monitor for indications of a future bubble collapse.
These include a meaningful economic slowdown, sustained and irreversible interest rate increases, or a scenario where artificial intelligence companies struggle to secure funding.
However, the firm emphasized that it does not believe these risks are imminent and sees additional time before such warning signals begin to emerge.
Barclays Raises Price Targets
Separately, Barclays analysts increased their price targets on both Samsung and SK Hynix, citing ongoing supply constraints across the memory chip market.
The bank highlighted growing interest in long-term agreements (LTAs), which could support market sentiment in the near term. More importantly, Barclays remains optimistic that average selling prices (ASPs) can remain elevated through the end of 2027 due to persistent supply-demand imbalances and expected increases in high-bandwidth memory (HBM) pricing.
Analysts noted that developments in conventional DRAM pricing will remain an important factor to watch over the coming years.
Strong Year-to-Date Performance
The remarkable performance of both companies is reflected in their year-to-date gains.
Samsung Electronics shares have surged more than 200% since the beginning of the year, while SK Hynix stock has advanced approximately 262.5%, making them among the strongest-performing semiconductor stocks globally amid the ongoing AI-driven technology boom.
