Analysts: Samsung's better-than-expected earnings report is already priced in; investors are concerned about the sustainability of AI.
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Samsung will release its preliminary Q2 financial results tomorrow: profits are expected to surge 18 times, with executives boasting that "one year's profits are equivalent to 40 years' worth."
According to BlockBeats, Samsung Electronics will release its preliminary Q2 2026 results on July 7th, while SK Hynix will list its ADRs on Nasdaq on July 10th. With these two major events for South Korea's semiconductor giants, the market is highly focused on the industry's health and the impact of AI chip demand on earnings. According to a compilation of forecasts from 30 analysts by the London Stock Exchange Group (LSEG), Samsung Electronics' Q2 operating profit is expected to be approximately 86 trillion won (about US$56.3 billion), with some brokerages predicting as high as 90 trillion won, representing a year-on-year increase of approximately 17-18 times, potentially marking its best quarterly performance in recent years. Prior to the preliminary earnings release, Samsung Electronics management has already released positive signals. Kim Yong-kwan, President of Business Strategy for Samsung Electronics Device Solutions (DS) division, stated at an internal all-hands meeting on July 3rd that the company's full-year 2026 operating profit is expected to meet market consensus expectations. Currently, the market generally expects Samsung Electronics' full-year operating profit to be approximately 300 trillion won (about US$200 billion), with improvements in AI servers, high-bandwidth memory (HBM), and wafer foundry business considered the main drivers of growth. Kim Yong-kwan also stated, "This year's profit will exceed the total cumulative profit of our 40 years in the semiconductor business." Industry insiders believe this is a rare instance of Samsung Electronics management proactively making a positive statement about the full-year profit outlook before officially disclosing the results, reflecting the company's strong confidence in the recovery of its AI-driven semiconductor business and its overall performance growth for the year. With the release of Samsung's financial report and the upcoming listing of SK Hynix's ADRs, the South Korean semiconductor sector will be entering its most important market observation window in the near future.
Samsung Electronics' operating profit this year is expected to exceed the cumulative total of the past 40 years, and the second quarter may set a new record for the highest operating profit in the history of global technology companies.
According to Mars Finance, on July 6th, Kim Yong-kwan, head of the semiconductor business's operational strategy at Samsung Electronics, released optimistic signals at a departmental meeting on July 3rd, stating that this year's operating profit will meet market expectations, and adding that "the cumulative profit over the past 40 years of the semiconductor business is less than this year's profit alone." The market currently expects Samsung Electronics' full-year operating profit for 2026 to be approximately 300 trillion won, with a consensus expectation of 84.6 trillion won for the second quarter—if realized, this would surpass Nvidia's record of $53.536 billion in the first quarter of this year, setting a new record for the highest single-quarter operating profit for a global technology company. Kim Yong-kwan also emphasized that the company continues to invest over 40 trillion won in capital expenditure annually and plans to further expand its investment scale to cope with the continued expansion of demand for AI semiconductors. The combined performance of South Korea's two semiconductor giants is equally remarkable. SK Hynix's second-quarter operating profit is expected to be around 64.4 trillion won, bringing the combined total for both companies to approximately 149 trillion won, approaching 150 trillion won. However, some market analysts point out that the storage sector's stock prices have recently shown signs of peaking and declining. Whether they can rise further depends on whether the earnings significantly exceed expectations. The size and duration of long-term supply contracts and the price trend of storage in the second half of the year will be key variables to watch. Furthermore, SK Hynix's ADRs will be listed on July 10th. HSBC has raised its target price from 2.9 million won to 4 million won, believing that the ADR listing will improve accessibility for global investors and could bring a valuation premium of approximately 20%. JPMorgan Chase points out that the second-quarter earnings season will be a watershed moment for reassessing the storage cycle.
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.
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)
Samsung's performance will be a key test for the AI chip market; Q2 operating profit is expected to surge 18 times.
Samsung Electronics, the memory chip maker, is set to release its second-quarter results on Odaily. Analysts predict preliminary operating profit of 84.3 trillion won (approximately $55.1 billion), an 18-fold increase year-over-year and exceeding its full-year profit for 2025. Revenue is expected to grow by 127% to a record 169 trillion won. Since June, chip stocks have experienced several significant corrections due to market concerns about intensified competition, potential overcapacity, and the return on massive AI investments. This further amplifies the importance of Samsung's results, leaving very little room for disappointment given already high market expectations. Roundhill Financial CEO Dave Mazza stated, "Samsung's results come at a time when the market is simultaneously questioning the supply and demand sides of the investment logic in memory chips. If the results are close to market expectations, it will help quell the controversy and benefit Samsung." (Jinshi)
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%.