Samsung Electronics projected on Tuesday a 19-fold increase in second-quarter operating profit, exceeding its total earnings from the previous three years combined.
Samsung estimated its operating profit for the April-June quarter at 89.4 trillion won ($58.44 billion), up sharply from 4.7 trillion won a year earlier. The company also projected revenue to climb 129 percent year-on-year to 171 trillion won.
AI boom concerns erase $80 billion from the company’s market value
Despite the stellar forecasts, investor concerns that the artificial intelligence (AI) boom could lose momentum erased more than $80 billion from the company’s market value.
The South Korean tech giant has been a major beneficiary of the AI-driven expansion of data centers, which has pushed memory chip prices to record levels. But the outlook for chipmakers has become more uncertain amid fears that major U.S. technology companies could scale back infrastructure spending, potentially weakening demand for AI chips.
Despite the stronger-than-expected earnings outlook, Samsung’s shares fell as much as 10.1 percent before closing 6.92 percent lower. Rival SK Hynix also declined 6 percent, contributing to a 4.9 percent drop in South Korea’s benchmark KOSPI index.
Analysts said the sell-off reflected elevated investor expectations, coupled with concerns that spending on AI data centers could slow, potentially weighing on future demand for memory chips.
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Core memory chip business to remain primary earnings driver
Samsung is a key supplier to NVIDIA and is also deploying the company’s AI graphics processing units (GPUs) to develop its own data centers. Its core memory chip business is expected to remain the primary earnings driver for the quarter. However, analysts anticipate its contract chip manufacturing (foundry) division could post losses due to higher bonus expenses following a major worker payout agreed across its semiconductor operations in May.
Meanwhile, Samsung’s smartphone and consumer electronics businesses are expected to face pressure from rising component costs, particularly higher memory prices, which may have dampened consumer demand.
The company said it will publish its full second-quarter earnings report on July 30.
Samsung’s shares have more than doubled so far in 2026, making the stock more susceptible to profit-taking after its strong rally. Analysts also noted that elevated leverage in South Korea’s equity market through exchange-traded funds (ETFs) has contributed to heightened volatility in the company’s share price in recent months.
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