Samsung Electronics has announced preliminary financial results for the second quarter, surpassing even the most optimistic market expectations. The company's operating profit is forecast at 89.4 trillion won ($58.4 billion) — 19 times higher than the same period last year. However, instead of celebrating, investors are massively taking profits: shares of the South Korean giant fell more than 6% at the market open.
It seems paradoxical: the company has been breaking records for three consecutive quarters, yet the market reacts with a red candle. In reality, it's entirely logical. Over the past 12 months, Samsung's market capitalization has increased fivefold, and the current correction is a classic case of short-term profit-taking. Investors chose not to take risks and exited positions immediately after the release of such a strong report.
AI Boom Fuels Chips
The key growth driver is the semiconductor division. Demand for memory used in AI systems, particularly HBM and high-performance DRAM modules, continues to drive up prices. According to analysts at Citi Research, DRAM prices surged 44% in the quarter, while NAND flash rose 53%. Meanwhile, supply in the standard chip market is significantly constrained: manufacturers are reallocating capacity to produce higher-margin products for AI data centers.
This creates a shortage in the general memory market, automatically pushing prices higher. Major clients are forced to sign long-term contracts to secure their supply. Analysts believe this market environment will persist at least until the end of next year.
However, not everything is rosy. Excluding bonus payments to employees in the semiconductor division, which are now tied to operating profit, Samsung could have posted a result exceeding 100 trillion won. These payments are expected to weigh on other business segments, including contract chip manufacturing and logic chips.
Why the Market Doesn't Believe in Endless Growth
Despite the impressive figures, some investors remain skeptical. Concerns about a potential memory oversupply in the market have already hit some suppliers, although shares of Micron, for example, are performing well amid the AI boom. This divergence in dynamics only intensifies debates about the so-called "AI bubble."
Samsung, for its part, has pledged to invest 2,100 trillion won in the country's economy by 2040, but the schedule for these investments will be adjusted based on market conditions. The main risk for the bullish scenario is a potential slowdown in spending on data center construction and AI development.
Expert opinion: The market is overheated, and the current correction is a healthy reaction. However, the fundamental drivers — demand for AI chips and limited supply — remain intact. In the long term, Samsung looks attractive, but increased volatility should be expected in the coming weeks.