(Bloomberg) — Shares of Samsung Electronics Co. are having their best day since January 2021, as perceptions grow that the South Korean tech company is starting to look like a bargain after a months-long slump.
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The world’s largest maker of memory chips and smartphones saw its shares rise as much as 8.6% on Friday, breaking a five-day losing streak.
Despite the latest rally, Samsung is down nearly 32% this year, pressured by concerns about missing out on the artificial intelligence boom and lately the risk of falling victim to Donald Trump’s protectionist trade policies. With some traders attributing Friday’s rise to technical factors, it remains to be seen whether the gains will be sustainable.
The rise in Samsung’s share price is a “technical recovery of less than 50,000 won ($35.70),” a move that is positive for investor sentiment, said Daiwa Securities analyst SK Kim.
Shares of South Korea’s largest company were at 53,800 won in mid-afternoon trading. The 50,000 won limit is an important psychological support level for the country’s retail investors.
The stock is trading at a discount of more than 10% to the consensus estimate for its one-year accounting value, according to data compiled by Bloomberg.
Some investors remain cautious about the prospects.
“A lower valuation is justified given the trade risks around Korea and also the catch-up in HBM, which will take time, and a weak memory environment,” said Sat Duhra, a fund manager at Janus Henderson Group, referring to high-bandwidth memory. “There are better tech stocks to own here – most of them are in Taiwan.”
–With help from Abhishek Vishnoi and Winnie Hsu.
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