- Samsung expects a 19-fold jump in Q2 operating profit to 89.4 trillion won.
- Revenue is projected to reach 171 trillion won, beating most market estimates.
- Despite record earnings, Samsung shares fell as investors questioned the AI boom.
Samsung Electronics expects one of the strongest quarters in its history after demand for AI memory chips sent both sales and profits significantly higher.
The South Korean chipmaker forecast second-quarter operating profit of 89.4 trillion won ($58.4 billion) for the April-June period, up nearly 19 times from the same quarter last year. The figure also exceeded market expectations, with analysts forecasting between 84.2 trillion won and 87.3 trillion won.
Revenue is expected to reach 171 trillion won, a 129% increase from a year ago and above the consensus estimate of 169.2 trillion won, although slightly below some forecasts of 173.3 trillion won. Samsung will publish its complete earnings report, including net income and business division results, on July 30.
The company has now delivered its third consecutive record quarterly operating profit, driven almost entirely by the global race to build AI infrastructure.
Chip Shortages Keep Prices Rising
Demand for AI data centers has created an intense shortage of advanced memory chips, particularly high-bandwidth memory (HBM), server DRAM, and NAND flash.
Major AI companies, including Nvidia and OpenAI, have repeatedly pointed to memory shortages as one of the biggest limits on AI expansion. Chipmakers have moved production toward premium AI memory, reducing the supply of conventional memory used in smartphones, laptops, and other consumer electronics.
Due to the imbalance, the average DRAM prices climbed more than 40% during the April-June quarter compared with the previous quarter, while NAND prices rose over 50%, according to reports.
Research firm IDC said demand from AI data centers has created supply conditions unlike anything the memory industry has experienced before. Analysts widely expect supply constraints to continue through at least 2027, allowing Samsung, SK Hynix, and Micron Technology to maintain strong pricing power.
Investors Focus on AI Valuations Despite Record Earnings
Shares fell between 6% and 8% after the earnings guidance, as investors questioned whether the current pace of AI spending can continue. Many had expected even stronger results after Samsung’s shares gained roughly 165% this year following a fivefold rally over the past year.
Samsung has also lagged domestic rival SK Hynix, whose stronger exposure to AI-focused memory chips helped its shares climb roughly 260% this year.
Meanwhile, South Korea’s Kospi index reversed earlier gains, while weakness in Korean memory stocks also weighed on companies such as Micron. Investors are increasingly turning attention from AI growth stories toward whether massive investments in AI infrastructure will continue producing equally strong returns.
Industry analysts say AI demand remains strong through next year, although visibility beyond that is less certain. Others argue there is still no evidence that customer demand is catching up with production capacity, keeping the supply environment favorable for memory manufacturers.
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