Samsung's Record Profit Fails to Impress Investors as AI Concerns Linger

Samsung Electronics posted a record operating profit of 89.4 trillion won ($58.4 billion) for the second quarter, a 19-fold increase year-on-year, but its stock fell as much as 10% amid investor doubts about the sustainability of the AI-driven chip boom. The company also forecast revenue of 171 trillion won, up 129% annually, exceeding expectations for profit but slightly missing on revenue. Despite the stellar results, Samsung's market value lost over $100 billion, dragging down the KOSPI index.

Market Reaction

Investors had already priced in strong results after a rally that more than doubled Samsung's stock this year. "The solid results were widely expected and largely discounted," said Albert Yong of Petra Capital Management Source: mileniomx. The actual revenue miss, attributed to slower-than-expected DRAM price increases, triggered selling. Citi Research noted DRAM and NAND prices rose 44% and 53% quarter-on-quarter, respectively Source: portafolioco.

Concerns Over AI Sustainability

Analysts warned that the AI chip demand could slow if major tech firms curb data center spending. "Investors remain worried about the sustainability of the AI boom and the risk of a slowdown in AI infrastructure spending by major US tech companies," Yong added Source: euronewses. Morningstar analyst Jing Jie Yu pointed to the revenue miss as a sign that DRAM price increases were more moderate than expected, unsettling investors who now question whether memory prices have peaked Source: euronewses.