Samsung Profit Soars 19-Fold to Record on AI Chip Boom; Nvidia Edges Higher After Hours
Samsung Electronics’ Q2 operating profit surged nearly 19-fold to a record 89.4 trillion won, fueled by insatiable AI memory demand. Nvidia (NVDA) ticked up 0.37% in after-hours trading.
South Korean tech giant Samsung Electronics posted preliminary Q2 results showing operating profit surged nearly 19-fold year-over-year, marking a third consecutive record high as global demand for AI memory chips shows no sign of cooling. As of after-hours trading on July 6, Nvidia (NVDA) edged up 0.37% to $195.55.
- Operating profit: Samsung expects Q2 operating profit of 89.4 trillion won (~$58.4 billion), up roughly 1,800% from 4.7 trillion won a year ago and ahead of Q1’s 57.2 trillion won.[CNBC]
- Revenue: Q2 revenue came in at about 171 trillion won, more than doubling from the same period last year.[BBC]
- Market reaction: Despite the record print, Samsung shares opened roughly 4% to 5% lower in Seoul on Tuesday (July 7).[CNBC]
- Analyst take: Counterpoint Research analyst Marc Einstein called the performance “one of the best quarterly showings ever,” approaching the tech-sector records Nvidia set earlier this year.[BBC]
- Industry backdrop: IDC analyst Bryan Ma noted that AI data-center demand for semiconductors is “unlike anything the memory industry has ever seen,” and expects supply constraints to persist into next year.[BBC]
- Nvidia (NVDA) price action: As of after-hours trading on July 6, Nvidia (NVDA) was at $195.55, up 0.37% (+$0.72) from the prior close of $194.83. The stock hit an intraday high of $197.55 and a low of $193.99.[Real-time quote]
South Korean tech giant Samsung Electronics on Tuesday (July 7) released preliminary Q2 results, showing operating profit surged nearly 19-fold to 89.4 trillion won (~$58.4 billion), a third consecutive record. The blowout was driven by relentless global demand for AI memory chips and supply constraints that have pushed chip prices higher. Despite the stellar numbers, Samsung shares opened roughly 4% to 5% lower in Seoul. Meanwhile, Nvidia (NVDA) edged up in after-hours trading, closing at $195.55 as of 11:00 p.m. ET on July 6, up 0.37% from the prior close.
Record Profit, AI Demand the Core Driver
In its preliminary earnings guidance released Tuesday, Samsung said it expects Q2 (April-June) operating profit of 89.4 trillion won, far above the 4.7 trillion won in the same period last year and ahead of Q1’s 57.2 trillion won.[CNBC] Revenue for the quarter was about 171 trillion won, more than doubling from a year ago.[BBC]
Counterpoint Research analyst Marc Einstein called the expected profit “one of the best quarterly showings ever,” approaching the tech-sector records Nvidia set earlier this year.[BBC] “This is all about the AI boom — memory companies are riding a wave of limited supply and unprecedented demand,” he added.[BBC]
Samsung, one of the world’s largest semiconductor makers, produces chips for Nvidia (NVDA) and Google, among others. Insatiable demand from AI data centers for high-performance memory chips has kept semiconductor supply tight and prices elevated. IDC analyst Bryan Ma said AI data-center demand for semiconductors is “unlike anything the memory industry has ever seen,” and has also squeezed supply for everyday electronics. “We do expect supply constraints to persist into next year given the relentless demand from AI data centers,” he said.[BBC]
‘Buy the Rumor, Sell the News’ as Shares Dip
Despite the record results, Samsung shares took a hit in Seoul trading on Tuesday. CNBC reported the stock opened nearly 5% lower,[CNBC] while BBC noted a roughly 4% decline Tuesday morning.[BBC]
This “buy the rumor, sell the news” pattern isn’t new. BBC noted that in May, Nvidia (NVDA) shares also fell after it reported record quarterly sales and profit. At the time, some analysts pointed to growing investor concern over intensifying competition in the sector.[BBC]
Despite the short-term pressure, Samsung’s long-term momentum remains strong. Its market cap has more than doubled since the start of the year, while South Korean rival SK Hynix has surged over 200%. The two heavyweights have also helped lift the benchmark Kospi index by more than 80% year-to-date.[BBC]
Supply Chain Syncs as AI Investment Wave Continues
Samsung’s results are the latest signal of the AI supply chain’s strength. Just days earlier, Hon Hai Precision Industry Co., another key Nvidia (NVDA) supplier, reported better-than-expected quarterly sales. According to Bloomberg, Hon Hai posted a 40% year-over-year increase in quarterly sales, beating estimates, and said AI demand is accelerating. The company stated that AI server rack shipments are expected to maintain growth momentum this quarter, while demand for information and communications technology products is entering its peak season.[Bloomberg]
To seize this historic opportunity, governments and corporations worldwide are ramping up investment. In June, South Korea unveiled a plan led by Samsung and SK Hynix to invest at least $880 billion over the next several years to expand the country’s chip manufacturing capacity.[BBC] Meanwhile, rivals in Japan, China, and Taiwan are also pouring money into building chip factories to meet surging demand.[BBC]
For Nvidia (NVDA), the stock was steady in after-hours trading following Samsung’s release. As of after-hours on July 6, Nvidia (NVDA) was at $195.55, up 0.37% (+$0.72) from the prior close of $194.83. The stock hit an intraday high of $197.55 and a low of $193.99. Samsung’s full formal earnings report is expected later this month, which will provide more granular segment data.
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