A blockbuster year for one stock may have further to run, according to Morgan Stanley, which argued the company is “setting up for a very strong 2026” even after a 108% year-to-date rally.

In a new note, Morgan Stanley analyst Shawn Kim said the bank expects “very strong 4Q25 prelims on January 8” for Samsung Electronics but emphasised that “the reaction to the print is always more important than the data itself.” 

Despite elevated expectations, the firm believes the 12-month outlook for demand, supply and competitive positioning remains highly favourable for the company.

Morgan Stanley cited surging memory prices as a major driver. The analyst stated that DRAM pricing is tracking close to +50% quarter-on-quarter, while NAND is running at +30%, helped by a richer server and eSSD mix. 

“HBM4 sample feedback remains positive with no revisions required,” wrote Kim.

On the numbers, Morgan Stanley expects Samsung to post KRW18 trillion in preliminary operating profit for the fourth quarter, including more than KRW15 trillion from memory, alongside improving results in foundry and resilient smartphone and OLED demand.

Critically, the bank believes the memory upcycle is still in its early stages. It expects Samsung’s memory profits to “grow 310% in 2026,” potentially nearing KRW100 trillion, with DRAM pricing forecast to rise another 30–40% in the first quarter of 2026.

Despite the stock’s massive rally, Morgan Stanley expects shares to “test the previous 2x P/B peak.”

“Earnings forecasts continue on a steep upward trajectory, and quality remains on sale for the stock, with past dislocations (HBM) appearing temporary,” concluded Kim.