A manager of a $9.6 billion Lazard Asset Management emerging markets fund has added Samsung Electronics to its portfolio for the first time in over a year, capitalizing on the stock's steep decline in July.

Monika Shrestha, co-manager of the Lazard Emerging Markets Equity Portfolio, bet that the memory chip upcycle, which has driven Samsung's massive profits, will persist into 2028. Bloomberg-compiled data shows her fund has outperformed 93% of peers over the past month and 98% over the past five years.

Shrestha said in an interview that Samsung's recent stock price drop is "an attractive buying opportunity." While crowded trades and high volatility have spooked AI-themed investors, she expects the broader narrative of strong chip sales driven by large tech company spending to remain intact.

"Memory price increases will slow, but the overall memory market still leans toward higher prices," the fund manager said. "There is no sign of slowing demand for capital expenditures from hyperscale data centers."

Shrestha noted that Samsung is a textbook bottom-up stock selection case, with attractive valuation and a high return on equity (ROE). Its expected ROE has surged to a record high of over 50%, compared to the average ROE of about 35% for the global chip peer Philadelphia Semiconductor Index.

Underweighting tech stocks relative to the benchmark MSCI Emerging Markets Index helped Shrestha's fund weather the July selloff. She reduced positions in SK Hynix after its strong rally, reinvesting the proceeds into energy stocks like Petroleo Brasileiro SA and Vista Energy, as well as Chinese consumer and financial stocks.

SK Hynix remains the fund's second-largest holding, trailing only Taiwan Semiconductor Manufacturing Co. Over 60% of Lazard's fund exposure is concentrated in emerging Asian markets, with higher allocations to mainland China, Taiwan, and South Korea.

Shrestha said that the threat of increased competition from Chinese memory makers like ChangXin Memory Technologies has stirred AI trades in recent weeks, potentially posing a risk to pricing power over the long term. Despite this, she remains bullish on the memory theme and believes Samsung's stock offers good value.

Samsung's shares are down 36% from their all-time high but are still up nearly 230% from a year ago, driven by investor frenzy for memory stocks.