Samsung Electronics stunned the market with a preliminary second-quarter operating profit forecast of approximately 89.4 trillion Korean won—nearly 19 times the 4.68 trillion won reported in the same quarter last year. The semiconductor giant also projected cumulative sales of around 171 trillion won, far above the 74.57 trillion won recorded a year earlier. The surge reflects explosive demand for high-bandwidth memory (HBM), server DRAM, and NAND flash used in AI data centers, as well as constrained supply that has pushed chip prices sharply higher. DRAM and NAND contract prices jumped 44% and 53% quarter-on-quarter, respectively, according to the Financial Times.
Despite what would be a third consecutive quarter of record operating profit, Samsung’s stock plunged as much as 7.9% on Tuesday, dragging South Korea’s Kospi lower and putting pressure on memory rivals such as SK Hynix and US-listed Micron Technology. Analysts pointed to a classic “sell the news” dynamic: investors had aggressively raised earnings expectations ahead of the guidance, and even the blockbuster numbers failed to clear an ever-higher bar. “The market was expecting even stronger results,” said Counterpoint Research director Tom Kang, while Kiwoom Securities analyst Han Ji-young noted that true whisper numbers may have surpassed 85 trillion won, leaving room for disappointment.
Broader concerns over AI-related valuations also weighed on sentiment. Investors are increasingly questioning whether the massive capital expenditures by big tech on AI infrastructure will generate sufficient returns, making them reluctant to reward companies merely for AI exposure. Ryu Young-ho of NH Investment & Securities cautioned that “the market is becoming more cautious about whether massive AI investment will continue at the current pace.” The pessimism rippled through emerging markets, with the MSCI Emerging Markets Asia Index sliding and South Korean tech stocks dragging it lower.
The implications extend beyond semiconductors. Weakness in Korean memory stocks has historically spilled over to global technology funds and risk assets. Crypto investors, who have become correlated with AI-driven risk appetite, may also feel the indirect pressure if the sell-off deepens. Samsung’s full results on July 30, including its HBM4 commercial shipments and divisional breakdowns, will be critical in determining whether the record earnings are enough to restore confidence in AI-linked valuations—or if markets continue to demand even stronger proof that the boom can be sustained.
