Samsung forecasts 19-fold profit jump to $58 billion, shares slide on AI spending doubts
Samsung Electronics forecast a 19-fold rise in second-quarter operating profit to a record $58 billion, driven by AI chip demand, but its shares fell as much as 10% on concerns the boom may not last.
Record earnings
Samsung Electronics on Tuesday estimated its April-June operating profit at 89.4 trillion won ($58.44 billion), a 19-fold increase from 4.7 trillion won a year earlier. The preliminary figure beat an LSEG SmartEstimate of 87.3 trillion won and marked the third consecutive quarter of record profits. Revenue likely rose 129% to 171 trillion won. The company will release detailed divisional results later this month.
- Q2 2025
- 4.7 trillion won
- Q2 2026
- 89.4 trillion won
AI boom drives demand
The surge reflects the ongoing artificial intelligence boom, which has driven memory chip prices to record highs. Samsung, the world's largest memory chipmaker, has benefited from soaring demand for high-performance processors used in data centers. The company also gained from higher semiconductor prices as demand outstrips production capacity. Professor Kim Dae Jong of Sejong University said the preliminary numbers point to "the highest quarterly operating profit in history, surpassing Nvidia."
If Samsung manages to maintain this level of performance, the company could become the world's leading manufacturing company.
Stock market selloff
Despite the record numbers, Samsung shares fell as much as 10% intraday and closed down around 7% to 9%, depending on the exchange. The selloff spread to competitors such as Infineon in Germany and weighed on markets in Japan and Europe. Analysts said the strong results had been largely priced in after months of rallying, and investors took profits amid doubts about the sustainability of AI-driven capital spending.
The market is showing signs of increasing AI fatigue.
Analyst reactions
Some economists described the episode as a first serious AI stress test, questioning how companies in the sector can generate adequate returns on massive investments. The selloff came even as South Korea's president announced new investments in the semiconductor sector, though details were not immediately available. Samsung also faces pressure from domestic rival SK Hynix, which has been gaining ground in high-bandwidth memory chips used in AI applications.
