Samsung's 19-fold rise in profit fails to impress investors as AI chip stocks fall

What happened: Samsung Electronics (005930.KS) banal slumped successful Asia, starring a broader diminution successful spot stocks arsenic investors took profits from the AI-fueled rally.

What's down the move: The South Korean representation shaper reported a preliminary operating nett of astir $58 cardinal for the April–June quarter, marking a 19-fold leap from a twelvemonth agone and exceeding expert expectations.

Despite the awesome earnings, Samsung banal fell arsenic overmuch arsenic 10% successful Seoul arsenic investors locked successful profits aft the shares had surged astir 150% this year.

"Results were 'only' 6% up of estimates, and it seems to person brought successful a bout of nett taking," Deutsche Bank analysts wrote connected Tuesday morning.

David Morrison, elder marketplace expert astatine Trade Nation, noted, "It seems that investors are acrophobic that semiconductor and different AI-adjacent stocks whitethorn conflict to support specified precocious levels of income and margins going forward."

Shares of US-based representation spot shaper Micron (MU) sank much than 6% successful premarket trading. Memory and retention plays Sandisk (SNDK) and Western Digital (WDC) besides fell.

What other you request to know: Investors were intimately watching Samsung's results arsenic the company, on with peers SK Hynix (000660.KS) and US-based Micron, has go a bellwether for the AI trade.

A captious bottleneck successful the proviso of high-bandwidth representation for information halfway chips has sent shares of the large manufacturers soaring this year, with Wall Street seeing proviso constraints good into 2027.

Samsung remains the world's largest representation manufacturer, starring successful some DRAM and NAND flash production.

Samsung, SK Hynix, and Micron topped a $1 trillion valuation successful May earlier pulling backmost amid increasing concerns that the AI commercialized whitethorn beryllium successful a bubble.

Ines Ferre is simply a Senior Business Reporter for Yahoo Finance covering the US banal market, publically traded companies, and commodities.

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