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Samsung Electronics (KS:005930) forecast record-breaking second-quarter earnings on Tuesday, driven by surging demand for artificial intelligence (AI) memory chips. Despite posting stronger-than-expected operating profit, Samsung shares fell as much as 8% as investors locked in gains and questioned whether the AI-driven growth cycle can maintain its momentum.
The South Korean technology giant expects operating profit for the April-to-June quarter to reach 89.4 trillion won ($58.43 billion), a dramatic increase from 4.68 trillion won recorded a year earlier. The result also exceeded Bloomberg analysts’ estimate of 84.2 trillion won, marking Samsung’s highest quarterly operating profit on record and its third consecutive quarter of record earnings.
Samsung also projected revenue of 171 trillion won, more than doubling from 74.57 trillion won in the same period last year. However, the figure came in slightly below market expectations of 173.3 trillion won, contributing to investor disappointment despite the strong profit growth.
The company’s exceptional performance was largely fueled by robust AI-related demand. Global technology companies continue investing heavily in AI infrastructure, driving strong orders for high-bandwidth memory (HBM) and traditional DRAM chips. Tight supply conditions have pushed memory prices higher, significantly benefiting Samsung’s semiconductor business.
Samsung remains a key supplier to NVIDIA (NASDAQ:NVDA), providing memory products while also utilizing NVIDIA’s AI processors to expand its own data center capabilities. The memory division is expected to remain the company’s primary earnings driver during the quarter.
However, Samsung’s foundry business is likely to report weaker results due to higher labor costs following a substantial employee bonus agreement reached earlier this year. Meanwhile, its smartphone and consumer electronics divisions are facing pressure as rising memory prices increase production costs and soften consumer demand.
The earnings announcement weighed heavily on South Korea’s stock market. Samsung’s shares dropped sharply, while rival SK Hynix also declined around 7%, dragging the KOSPI index lower. Samsung has more than doubled in value during 2026, making the stock susceptible to profit-taking after its strong rally. The company will release its complete second-quarter financial results on July 30.
