The South Korean chipmaker beat market estimates with a sharp rise in second-quarter earnings, though investors remained cautious about the long-term pace of AI-driven demand.
Samsung Electronics expects its second-quarter operating profit to rise nearly 19-fold year-on-year, driven by strong demand for memory chips used in artificial intelligence (AI) data centres, even as its shares fell on concerns that the current AI boom may lose momentum.
According to Reuters, Samsung estimates April-June operating profit at 89.4 trillion won (about US $58.4 billion), above market expectations of 87.3 trillion won. Revenue is expected to increase 12% year-on-year to 171 trillion won, marking the company’s third consecutive quarter of record operating profit.
Despite the strong earnings outlook, Samsung shares dropped as much as 10.1%, while rival SK Hynix also declined, reflecting investor worries over slowing AI infrastructure spending and lofty market expectations.
“Samsung‘s strong earnings were widely expected and had largely been priced in ahead of the results,” said Albert Yong, managing partner at Petra Capital Management. He added that investors remain concerned about the sustainability of the AI boom and the risk of slower spending by major U.S. technology firms.
Lee Min-hee, an analyst at BNK Investment & Securities, said Samsung delivered better-than-expected earnings despite setting aside sizable employee bonus provisions, adding that operating profit would likely have exceeded 100 trillion won without those costs.
Samsung is scheduled to release detailed second-quarter results on July 30. According to Reuters, analysts continue to see memory chips as the company’s main growth driver, although future demand will depend on sustained investment in AI infrastructure.
