Samsung shares tumble 8% after Q2 profit outlook

Samsung Electronics shares fell about 8% on Tuesday after the company guided second-quarter operating profit of 89.4 trillion won, a 19-fold increase from a year earlier. The guidance points to what could be the firm’s most profitable quarter to date.

Investors reacted to the guidance with concern that the market had already priced in strong results. Samsung said the Q2 outlook was driven by robust demand for high-bandwidth memory (HBM) used in servers running generative AI models and by tight supply of conventional DRAM and NAND chips, which has pushed contract prices higher.

Samsung began commercial shipments of its HBM4 product in the second quarter, making Q2 the first period when the newest AI memory product could contribute to revenue. The company’s Device Solutions division reported 81.7 trillion won in revenue and 53.7 trillion won in operating profit in the first quarter, supported by AI-related demand and limited industry supply.

Industry contract prices for DRAM and NAND rose sharply quarter-on-quarter, supporting a run of record operating-profit quarters for memory makers. Analysts had increased forecasts ahead of the guidance as prices and demand from data centres climbed, leaving less room for upside in the official outlook.

Market participants are awaiting Samsung’s full results on July 30, which will include a divisional breakdown and show how much of the profit increase comes from memory versus foundry, mobile phones and consumer electronics. Investors want evidence that other businesses are not being squeezed by the same component-cost dynamics boosting chip profits.

Analysts and investors flagged risks to the sustainability of current demand, including potential delays in AI infrastructure projects, funding pressures at large cloud customers and the risk that rapid expansion could lead to oversupply.

Kim Sun-woo of Meritz Securities projected, “Memory chip selling prices should keep rising through the end of the year,” and expected the performance trend to continue into 2026, with memory supply likely to remain short of demand growth until at least late 2029. Han Ji-young of Kiwoom Securities cautioned, “A historic quarter may not be enough if investors were already expecting it,” adding that market expectations may have been above an 85 trillion won level.