The market ignored Samsung's impressive earnings forecast, and Samsung Electronics opened down 3%.
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US pre-market news at a glance: Samsung's earnings report triggered a collective weakness in semiconductor stocks in pre-market trading; SpaceX officially debuts on the Nasdaq 100 today.
According to BlockBeats, the following are key market news items before the US stock market opened on July 7th: 1. Samsung released its Q2 earnings forecast, showing an operating profit increase of over 1800% year-on-year, with single-quarter profits exceeding the total of the previous three years. Simultaneously, the company's revenue also increased by 129% year-on-year, reaching 171 trillion won. Affected by the semiconductor sell-off triggered by the "sell-off" of Samsung's earnings, chip-related technology stocks generally weakened in pre-market trading. The three major US stock futures indices showed mixed results in pre-market trading: Dow Jones futures rose 0.41%, Nasdaq 100 futures fell 0.9%, and S&P 500 futures fell 0.09%. 2. SpaceX officially debuted on the Nasdaq 100 before the US stock market opened today, with Wall Street institutions collectively bullish. Most institutions believe that SpaceX is no longer just a traditional aerospace company, but a platform company with the potential for rocket launches, Starlink satellite internet, AI infrastructure, and future space computing. 3. DeepSeek is secretly developing its own inference chip. If successful, this would reduce reliance on external suppliers and give it more cost-effective hardware control. However, the project is still in its early stages and faces manufacturing and memory acquisition restrictions due to US export controls. 4. UBS recommends investors buy SK Hynix's upcoming American Depositary Receipts (ADRs) and sell its South Korean shares, as these new shares are expected to trade at higher prices. 5. JPMorgan strategists say the recent weakness in semiconductor stocks should be seen as a buying opportunity, as the chip upcycle is not yet over, and truly meaningful new supply may not appear until 2028. 6. US ADP employment change for the week ending June 20 was 21,000, compared to 30,750 in the previous week. 7. BlackRock will launch an ETF tracking the tech-heavy Nasdaq 100 index, aiming to meet investors' growing demand for participation in the AI-driven stock market rally and challenge Invesco's dominant position. 8. Amazon is returning to the US bond market to raise funds for its artificial intelligence infrastructure. The company will issue eight benchmark bonds with maturities ranging from 3 to 40 years, raising at least $25 billion in the dollar bond offering. 9. Global brokerages have begun coverage research on Elon Musk's SpaceX (SPCX.O), and a preliminary consensus has formed on Wall Street: buy the stock. At least six brokerages, including Morgan Stanley, Goldman Sachs, and UBS, have given it a buy rating, optimistic about its long-term growth prospects, although doubts remain about profitability and valuation.
Morningstar: Samsung Electronics' revenue forecast may disappoint investors.
According to BlockBeats, on July 7th, Morningstar analyst Jing Jie Yu stated that investors may have been slightly disappointed with Samsung Electronics' revenue forecast. He pointed out that Samsung Electronics' projected operating profit met market expectations, but its revenue forecast of 171 trillion won was slightly below the average expectation. This weaker-than-expected performance may be due to a lower-than-expected increase in DRAM prices. This could have spooked investors who increasingly anticipated a structural strengthening of memory chip prices. As investors became more cautious, Samsung Electronics' stock closed down 6.9%, narrowing its year-to-date gains to slightly below 150%.
Analysts: Samsung's better-than-expected earnings report is already priced in; investors are concerned about the sustainability of AI.
According to Mars Finance, on July 7th, Samsung Electronics issued a better-than-expected earnings forecast: the company's operating profit increased by over 1800% year-on-year, with single-quarter profits exceeding the total of the previous three years. Simultaneously, the company's revenue also increased by 129% year-on-year, reaching 171 trillion won. However, investors seemed unconvinced, and Samsung Electronics' stock price fell sharply after the South Korean stock market opened, with a maximum drop of 8%. Analysts attributed Samsung's weak stock price to some overly high market expectations: after including employee bonus provisions, profits driven by record memory chip prices could have exceeded 90 trillion won. Furthermore, the market is also concerned about a potential slowdown in the construction of AI data centers. Albert Yong, Managing Partner of Petra Capital Management, stated, "Samsung's strong performance had already been widely anticipated by the market and largely priced in during the pre-earnings stock price increase. Investors remain concerned about the sustainability of the AI boom and the risk of a potential slowdown in AI infrastructure spending by major US technology companies."
South Korean stocks plunge 20%, nearing a bear market; the AI boom faces the awkward situation of "the more disastrous the earnings, the steeper the decline."
According to BlockBeats, on Wednesday afternoon, July 8th, South Korean stocks extended their losses as investors reassessed the outlook for AI demand. The KOSPI index fell by more than 6% at one point, breaking below 7200 points, and has cumulatively fallen by more than 20% from its all-time high last month, poised to enter technical bear market territory. Memory chip maker SK Hynix fell by as much as 5%, and Samsung Electronics fell by 6.9%. The Korea Exchange initiated a temporary trading halt on the KOSPI index, suspending algorithmic trading. South Korean stocks were among the strongest performing markets globally this year, but their performance is highly dependent on SK Hynix and Samsung Electronics, amplifying volatility when sector sentiment weakens. Even with Samsung Electronics announcing a 19-fold surge in quarterly profits earlier this week, chip stocks continued to be under pressure. Jordan Klein, a TMT sector expert at Mizuho Securities, stated that investors overreacted to Samsung's preliminary second-quarter results. He believes this sell-off in semiconductor stocks is more a sign of waning momentum than a deterioration in fundamentals. Klein stated that excluding one-off bonus expenses, Samsung's operating profit actually significantly exceeded expectations, with its storage business implied operating margin potentially exceeding 80%. He indicated that Samsung's single-quarter operating profit has already surpassed the total of the past three years, and reacting to Samsung's stock price based solely on preliminary results is "extremely short-sighted." Meanwhile, an AI trading rotation occurred in Asian markets. Hong Kong-listed Chinese stocks rose, with the Hang Seng China Enterprises Index rising as much as 3.4%, the Hang Seng Tech Index rising over 5% intraday, Alibaba rising over 8%, and Tencent rising over 3%. Market analysts believe that funds are flowing from crowded trades focused on AI infrastructure to markets with lower valuations and more value-oriented characteristics. Reuters' report on DeepSeek's self-developed chip and The Information's report on Zhipu AI considering designing its own AI chip further fueled this rotation. (Jinshi)
Samsung's soaring profits couldn't mask underlying concerns, and its stock price plummeted, dragging down the KOSPI index by 6%.
Odaily Odaily that Samsung Electronics, a South Korean company, released its preliminary second-quarter results this morning, showing a 19-fold year-on-year increase in operating profit, surpassing the total profits of the past three years. Specifically, Samsung forecasts second-quarter operating profit of 89.4 trillion won (up 1810.2% year-on-year), compared to market expectations of 87.3 trillion won. However, the company's stock price plummeted as the results failed to alleviate market concerns about the sustainability of the AI-driven chip boom. Samsung shares plunged more than 8% in early trading, while rival SK Hynix shares also fell 7.3%, dragging down the South Korean KOSPI index by 6%. Analysts attributed the weakness in Samsung shares to overly high market expectations—profits driven by record memory chip prices could have exceeded 90 trillion won after accounting for employee bonus provisions; in addition, the market was concerned that the construction of AI data centers might slow down. Albert Yong, Managing Partner at Petra Capital Management, stated, "Samsung's strong results were already widely anticipated by the market and largely priced in during the pre-earnings surge. 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." (Jinshi)
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