Samsung Electronics shares set to rebound Monday as Wall Street rally lifts sentiment

"I sold for nothing out of Friday fear." — a retail Samsung Electronics investor

"I plan to pass Samsung Electronics on to my children. I'm going to tell them never to sell before it hits 400,000 won ($299)." — economic YouTuber Shuka

Markets had sold off ahead of the US consumer price index release, but the data triggered a relief rally on Wall Street instead. With US stocks bouncing back, expectations are rising again that Samsung Electronics and SK hynix shares will follow suit.

The prevailing view in brokerage circles is that now is not the time to sell either Samsung Electronics or SK hynix.

New York stocks rebounded Friday for the first time in five sessions, lifted by falling crude oil prices and a CPI reading that came in broadly in line with forecasts. The Dow Jones Industrial Average closed up 509.19 points, or 0.98 percent, at 52,573.29.

The S&P 500 rose 65.28 points, or 0.86 percent, to 7,656.98, while the tech-heavy NASDAQ Composite gained 251.31 points, or 0.96 percent, to close at 26,333.04.

August CPI, which had been the focus of market attention, rose 0.4 percent from the previous month and 3.4 percent from a year earlier — matching consensus forecasts and sparing markets any additional shock.

Markets are now pricing in a near-certain Federal Reserve rate hike next week, yet stocks climbed anyway.

The positive mood on Wall Street bodes well for domestic markets Monday. Brokerages have issued a bold forecast that Samsung Electronics can accelerate its growth trajectory through HBM market share gains and improved foundry yields, even as its share price has lagged. Kim Dong-won, head of research at KB Securities, said Samsung's HBM4 sales in the third quarter are expected to more than triple quarter-on-quarter, with HBM4 accounting for more than 60 percent of total HBM revenue in the second half of the year.

KB Securities set a target price of 600,000 won for Samsung Electronics, saying the stock has significant room to rise given the steep growth momentum in its core business, along with the prospect of additional shareholder returns — including a share buyback and cancellation and cash dividends — before year-end.

At the same time, concerns are growing over a potential supply vacuum after Samsung Electronics and SK hynix bought back roughly half their planned repurchase amount — 25 trillion won — within just three weeks of launching their buyback programs. The two chipmakers had been in effect the sole buyers propping up the Kospi amid sustained selling by retail and foreign investors, with the buybacks serving as a buffer against sharp share price declines. The programs are expected to wind down in early October.

Park Se-ik, chief executive of Chessley Investment Advisory, said in a YouTube appearance that he expects both Samsung Electronics and SK hynix to trade in a range-bound pattern going forward. "I'd suggest range trading for the next year," he said.