Samsung Electronics has released its operating profit forecast for the second quarter at 89.4 trillion won ($58.4 billion) — 19 times higher than the same period last year. This figure not only exceeded analysts' expectations but also marked the third consecutive record quarter for the South Korean tech giant.
Despite these impressive numbers, the company's shares plunged more than 6% at the market open. Investors opted to lock in profits after a fivefold increase over the past twelve months, leading to a predictable, albeit sharp, correction.
The AI Boom as a Driver
Samsung's forecast surpassed the LSEG SmartEstimate consensus of 87.3 trillion won and the FnGuide estimate of 84.4 trillion won. Revenue is expected to rise 129% year-on-year to 171 trillion won, though this figure slightly missed analysts' forecasts of 173.3 trillion won.
The key growth driver is unprecedented demand for memory chips linked to the development of artificial intelligence infrastructure. According to Citi Research analysts, DRAM prices surged 44% quarter-on-quarter, while NAND flash prices rose 53%. As a monopolist in the high-performance HBM memory segment, Samsung is actively reallocating production capacity, creating a shortage in the market for standard modules used in PCs, smartphones, and servers.
The supply deficit is forcing major clients to switch to long-term contracts, which experts believe guarantees sustained high chip prices at least until the end of next year.
Notably, excluding bonus payments to employees in the semiconductor division — now tied to operating profit — Samsung's figure could have exceeded 100 trillion won. In May, the company reached an agreement with the union on a new compensation system, and these funds were included in the report.
Why Is the Market Selling?
The stock correction following a strong earnings report is a classic pattern of short-term profit-taking. Investors are selling off appreciated assets en masse without waiting for further growth. However, there are deeper reasons as well.
A clear divergence in sentiment has emerged in the chip market. Concerns about memory oversupply have hit some suppliers, while Micron's growth amid the AI boom has supported other players' stock prices. This discrepancy has amplified warnings about a so-called "AI bubble." Some investors doubt the sustainability of the current rally, especially given the potential slowdown in capital spending on data centers.
Samsung, for its part, has pledged to invest 2,100 trillion won in the country's economy by 2040, but the timeline for these investments will be adjusted based on market conditions.
My analysis: Samsung's paradox is a vivid example of how fundamentally strong metrics may not immediately reflect in stock prices due to market psychology and macroeconomic risks. However, the structural shortage in the HBM segment and long-term contracts create a solid foundation for further growth. The only question is how quickly investors will shift from profit-taking back to accumulating positions.