Stock Spotlight: Samsung
FILMED IN AUGUST 2026
Why is Samsung at the centre of the AI revolution? In this latest Stock Spotlight, Jamie Rosenwald of Dalton Investments explains why Samsung's leadership in high-speed DRAM (high-speed memory chips) technology has made it a critical supplier to the world's leading AI companies, and why he believes AI remains the company's most important growth opportunity.
Transcript
Samsung Electronics, which you own in your portfolio, is a ubiquitous company making products that we all are familiar with, whether you know it or not.
It provides my television at home, my washer dryer, It also provides my iPhone with its screen.
It is strongly run by a family, a Korean family and its capital allocation history is quite positive, meaning that it reinvests in its own businesses which continue to grow the businesses for the long term.
This is what makes Samsung unique and this is what makes Dalton excited to own Samsung for its clients.
Samsung's most critical area of need today in artificial intelligence. it is the leading maker of high speed DRAM. This is called HBM4.
These chips power the large language models that all of the major artificial intelligence companies are utilising whether they be Anthropic, Open AI or Genesis by Google or even Microsoft.
High speed DRAM or HBM4 is at the heart of all of the machines being generated for artificial intelligence by Nvidia, therefore making Samsung an essential piece of the AI puzzle.
Samsung Electronics addressable market is potentially all of us.
Samsung Electronics provides families and corporations with essential products that are needed for your home, your office and now more recently, are famous for artificial intelligence computer use.
Therefore the addressable market is extremely large and many of you are already customers.
When it was initially purchased for your portfolio, had a market it had a market capitalisation or a whole value of approximately $200 billion.
At that time, it had about $100 billion in cash on its balance sheet, and it traded for approximately five times cash flow.
Today, Samsung Electronics even after significant increase in valuation continues to have cash flow valuation of approximately five times.
What has changed is the enormous demand for artificial intelligence memory and the pricing of that product and Samsung is at the heart of all artificial intelligence, long term and high speed memory called HBM4.
We continue to feel that at a five times cash flow valuation, this company is extremely cheap.
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