Strong quarterly earnings highlighted Samsung Electronics’ continued recovery, but investor concerns over the future of the AI-driven chip boom pushed the company’s shares sharply lower.
Samsung estimated its operating profit for the April-June quarter at 89.4 trillion won (around $58.44 billion), marking a 19-fold increase from 4.7 trillion won reported during the same period last year. The figure also exceeded the market estimate of 87.3 trillion won. The company expects revenue to rise 129% year-on-year to 171 trillion won.
Despite the strong financial performance, Samsung shares fell by as much as 10.1%, while rival SK Hynix declined up to 10.6%, dragging South Korea’s benchmark KOSPI index lower. Analysts said the decline reflected investor concerns that AI infrastructure spending could slow after recent rapid growth.
The AI boom has significantly increased demand for memory chips, driving record prices. During the quarter, average selling prices for DRAM and NAND memory chips reportedly rose by 44% and 53%, respectively. However, analysts noted that Samsung’s revenue growth was slightly below market expectations due to more moderate DRAM price increases.
Samsung’s earnings also included provisions for employee bonuses under a wage agreement linked to operating profit. Analysts believe operating profit could have crossed 100 trillion won without these bonus-related expenses.
The company continues to benefit from strong demand for memory chips used in AI, smartphones, PCs and enterprise servers. However, losses in its foundry and logic chip businesses are expected to widen.
Looking ahead, analysts believe the biggest challenge will be maintaining AI-driven demand. Concerns remain that major technology companies could reduce AI infrastructure spending due to rising investment costs and uncertain returns.
Samsung is scheduled to announce its detailed quarterly results, including business-wise performance, on July 30. The company also recently announced plans to invest 2,100 trillion won in South Korea through 2040, while stating that future investments will depend on market conditions and business requirements.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream LinkedIn | The Mainstream Facebook | The Mainstream Youtube | The Mainstream Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.