The memory chip behemoth anticipates its second-quarter operating profit to surge nearly 20-fold year-over-year.

Since the final quarter of 2025, Samsung Electronics Co Ltd has consecutively broken its own records for revenue and operating profit across multiple quarters.

Key Highlights

Fueled by robust demand for artificial intelligence semiconductors, Samsung Electronics (Stock Code: 005930, down 6.92%) projects its second-quarter operating profit will skyrocket by 19 times compared to the same period last year, reaching approximately 89.4 trillion won ($584.7 billion). This continues the trend of setting new quarterly profit highs. However, this stellar forecast failed to provide a boost to the company's share price.

Several analysts note that this South Korean technology giant has consistently achieved record-breaking revenue and operating profit since Q4 2025. Its chip division is expected to drive significant profit growth further this year, with the core catalyst being the intense demand for AI processors.

In a preliminary earnings report released on Tuesday, Samsung indicated its operating profit for the April-June quarter is expected to hit a historic high of about 89.4 trillion won ($584.7 billion), marking a 56% increase from the previous quarter's record.

This projection surpassed the market consensus estimate of 85.054 trillion won compiled by FactSet.

The company also forecasts that quarterly revenue will double year-over-year to a record 171 trillion won.

As the world's largest memory chip manufacturer, Samsung's impressive performance comes amid persistent market concerns that the growth in capital expenditures related to AI computing infrastructure may be unsustainable in the long term. While Samsung's stock price doubled from April to June, investor apprehension resurfaced this month, halting the upward momentum.

During Tuesday's trading session, the stock plummeted by as much as 10%, closing down 6.9% at 296,000 won. Analysts suggest that many investors opted to take profits on the positive earnings surprise rather than continue buying at higher levels.

Kim Joo-yoon, an analyst at Mirae Asset Securities, stated in a research note, "The primary reason for Samsung's stock decline despite the record Q2 earnings is profit-taking by investors."

Despite the sharp pullback on Tuesday, the stock remains up nearly 150% year-to-date.

Some analysts pointed out that Samsung's actual operating profit would be even higher than the current guidance if not for the provision set aside for special bonuses in its chip division, scheduled for early next year. In May, Samsung reached an agreement to allocate 10.5% of the semiconductor division's full-year operating profit as special bonuses, contingent upon the company meeting specific profit targets.

Ahead of this earnings guidance, Peter Lee, an analyst at Citigroup, remarked that Samsung's recent stock retreat was merely a technical correction. The stock's substantial year-to-date gains were fueled by rising server memory prices, driven by demand for AI central processing units.

He noted, "The fundamentals of the memory chip sector remain solid, with strong demand for AI processors propelling server memory prices to consistently outperform the broader market." He subsequently raised his full-year 2026 operating profit forecast for Samsung from 334 trillion won to 401 trillion won.

In June, Samsung announced plans to invest approximately 400 trillion won to establish a new semiconductor cluster in southwestern South Korea, intensifying its focus on chips and artificial intelligence to meet expanding market demand.

Samsung is scheduled to release its complete quarterly financial report later this month, which will include detailed profit figures for each business segment.