Samsung Electronics has released preliminary financial results for the second quarter, surpassing the market's most optimistic expectations. The South Korean giant's operating profit, according to preliminary data, will reach 89.4 trillion won ($58.4 billion) — 19 times higher than a year earlier. Thus, the company records its third consecutive record quarter.
However, the stock market reaction was paradoxical: at the opening of trading, Samsung shares fell by more than 6%, continuing the correction after an impressive fivefold increase over the past 12 months.
Artificial Intelligence — the Main Growth Driver
The primary catalyst for the explosive profit growth remains the unprecedented demand for semiconductor products, driven by the development of artificial intelligence infrastructure. According to my data, DRAM chip prices surged by 44% over the quarter, while NAND flash prices rose by 53%. This price spike affected not only premium high-bandwidth solutions but also standard components for smartphones, PCs, and servers.
Active production of HBM (High Bandwidth Memory) chips has created a shortage in the standard module market. Major clients are forced to sign long-term supply contracts, guaranteeing Samsung the ability to maintain high selling prices for at least the next year. Excluding one-time bonus payments to employees of the semiconductor division, the company's operating profit could have exceeded 100 trillion won.
Why Are Investors Taking Profits?
The drop in shares amid record results is a classic example of profit-taking. Investors who multiplied their capital fivefold over the year preferred to lock in gains without waiting for further growth. This is standard market practice, especially amid growing concerns about a potential memory oversupply.
The chip market is currently experiencing a curious split: while Micron Technology shares continue to rise due to the AI boom, stocks of other memory manufacturers are under pressure. This divergence has intensified skepticism among some investors regarding the sustainability of the "AI bubble."
My analysis: Samsung's fundamentals remain exceptionally strong, and the current correction is nothing more than a temporary phenomenon. Building new production facilities takes years, so supply will remain limited even if demand begins to stabilize. The main risk to the bullish scenario is a potential slowdown in capital expenditures on data centers and AI infrastructure, but there are no signs of this yet. I recommend viewing the current decline as an opportunity to enter a position.