‘Never’ sell Samsung Electronics and SK hynix: an ‘enormous surge’ is coming soon
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Higher earnings do not ensure a higher share price
If hypothetical earnings per share are 100 and the price-to-earnings multiple is 10, price is 100 × 10 = 1000. Even if earnings rise to 120, up 20%, a multiple declining to 8 gives 120 × 8 = 960, which is 4% below the earlier price. This simple calculation illustrates changing market assessments of growth and risk. Examine supplier earnings alongside customer cash recovery and additional investment capacity, then ask how much improvement is already reflected in price.
Check for yourself
- Are the earnings reported or forecast, and what period and share count do they use?
- Is customer investment funded by operating cash or additional financing?
- Does the thesis hold without assuming that the current valuation multiple persists?
Limits of application
100, 10, 100 × 10 = 1000, 120, 20%, 8, 120 × 8 = 960 and 4% are assumptions. Dividends, dilution, taxes and trading costs are excluded; this calculates neither Samsung Electronics or SK hynix targets nor trading timing. The linked Amazon case reconciles past company-wide cash flow and establishes neither memory order volumes nor a share-price path.
- What to look for
- Explore why strong supplier earnings must be considered alongside customer investment burdens and financing risk.
- Why it matters
- Separate election scenarios, historical analogies and actual disclosures, then test conditions under which earnings, cash flow and valuation multiples can move in different directions.
Timeline
6 segmentsThe analyst cautions against building a purchase thesis on high memory-supplier earnings alone. Higher supply prices can raise customer costs, while durable orders depend on customer investment plans, financing and cash recovery. Falling customer free cash flow alone does not prove failed investment, and industry growth prospects differ from the fairness of the stock price paid.