Samsung Electronics signaled another blockbuster quarter on Tuesday, forecasting a third straight record operating profit as demand for artificial intelligence chips continued to fuel booming memory sales.
But investors weren’t impressed.
Following the forecast, Samsung’s stock plunged nearly 10%. The slump of the index heavyweight dragged on the Kospi, sending South Korea’s benchmark index down over 8%. Rival SK Hynix nosedived over 11%.
Samsung estimated second-quarter operating profit of 89.4 trillion South Korean won, or $58.7 billion — nearly 19 times higher than a year earlier and ahead of analysts’ expectations. The company expects revenue to more than double to 171 trillion won.
Yet the strong earnings failed to satisfy a market that has grown accustomed to blowout results from the biggest AI winners.
Samsung’s profits have been fueled by strong demand for the specialized memory chips that help train and run AI models. Analysts expect demand to continue outpacing supply.
“The memory cycle is still strong, but the market is starting to ask whether the easy part of the trade is already behind us,” wrote Charu Chanana, the chief investment strategist at Saxo, in a Tuesday note.
While Samsung’s results reinforced the strength of AI-driven memory demand, investors are now looking for more than strong sales. They want confident guidance, durable pricing power, and signs that the AI boom isn’t nearing its peak, she added.
“The question is no longer whether memory demand is strong. It is whether today’s shortage could eventually become tomorrow’s overcapacity problem if supply comes back too aggressively,” Chanana wrote.
Samsung isn’t alone. Nvidia, the face of the AI chip boom, has also seen investors react coolly to strong earnings in recent quarters as Wall Street demanded ever-bigger surprises.
In November, Nvidia CEO Jensen Huang acknowledged the no-win dynamic after the chipmaker’s third-quarter earnings.
“If we delivered a bad quarter, it is evidence there’s an AI bubble. If we delivered a great quarter, we are fueling the AI bubble,” he told employees.
James Thorne, the chief market strategist at Wellington-Altus, said the AI trade has become a victim of its own popularity.
“That is what happens when a bottleneck trade gets crowded: fundamentals stay strong, but earnings stop impressing because perfection was already priced in,” he wrote on X on Monday.
He said he believes the next phase of the AI buildout could reward other parts of the market, such as power, grid capacity, cooling, and physical infrastructure.
“Artificial intelligence is not over. But easy trade in it is,” Thorne wrote.