Samsung's Profit Surge Can't Mask Underlying Concerns, Stock Plunge Drags KOSPI Down 6%

Odaily reported that South Korean stock market heavyweight Samsung Electronics released its preliminary second-quarter results this morning. While operating profit surged 19 times year-on-year, surpassing the total profit of the past three years, the stock price fell sharply. Specifically, Samsung forecasted second-quarter operating profit of 89.4 trillion won (up 1810.2% year-on-year), compared to a market consensus of 87.3 trillion won. However, the results failed to alleviate market concerns regarding the sustainability of the AI-driven chip boom.

Samsung's stock price briefly plunged over 8% in early trading. Competitor SK Hynix's stock also fell 7.3%, dragging South Korea's benchmark KOSPI index down 6%. Analysts attributed Samsung's weak stock performance to overly high market expectations in some quarters. After accounting for employee bonus provisions, profits, propelled by record memory chip prices, could have exceeded 90 trillion won. Furthermore, there is growing concern about a potential slowdown in the construction of AI data centers.

Albert Yong, Managing Partner at Petra Capital Management, stated: "Samsung's strong results were already widely anticipated by the market and were largely priced in during the stock's run-up ahead of the announcement. Investors remain concerned about the sustainability of the AI boom and the risk of a potential slowdown in AI infrastructure spending by major US tech companies." (Jin Shi)