When Record Profits Aren’t Enough for AI-Hungry Investors
Samsung Electronics Co., the world’s largest memory chipmaker, delivered its strongest quarterly profit in over three years, driven by soaring demand for AI-related semiconductors. Yet, in a sign of how overheated expectations have become, the market reacted with disappointment.
Shares of Samsung fell as much as 2.1% in Seoul trading, erasing earlier gains, as investors who had bid up the stock in anticipation of even stronger results decided to lock in profits. The market’s muted reaction highlights a growing tension between record-breaking earnings and AI mania-fueled investor expectations that may now be near their peak.
Samsung Posts Its Highest Operating Profit Since 2021
For the September quarter, Samsung reported a 32% surge in operating income to 12.1 trillion won ($8.5 billion) — the company’s highest quarterly profit since 2021 — outpacing analysts’ forecasts. Revenue climbed 9% year-over-year, confirming that global chip demand has rebounded after a challenging two-year slump.
The strong results were primarily powered by the semiconductor division, which has benefited from a global rush to expand AI computing infrastructure. The chips Samsung produces — including high-bandwidth memory (HBM) and DRAM — are critical components in AI accelerators used by companies like Nvidia, AMD, and OpenAI.
Despite the upbeat figures, the stock’s decline reflected one thing: investors wanted more.
“Traders who were long into the print are just locking in gains,” said Haris Khurshid, Chief Investment Officer at Karobaar Capital LP. “Some rotation is also happening across semiconductors after the HBM hype trade ran hot. Structurally, nothing’s changed.”
AI Demand Lifts Chips — But Expectations Are Sky-High
Samsung’s rally since mid-2024 has been nothing short of remarkable. Shares have risen over 60% since June, driven by expectations that AI chip demand will fuel a new era of profit growth. The company’s improved position in high-bandwidth memory (HBM) chips — the key technology behind AI model training — has bolstered optimism that Samsung could regain market share lost to SK Hynix in recent years.
“Samsung’s operating profit was much bigger than anyone was expecting,” said Sanjeev Rana, Head of Research at CLSA Securities Korea. “Its high-bandwidth memory shipments have recovered significantly, rising around 70–80% from the previous quarter.”
Samsung’s success comes amid a wider AI hardware boom, with major tech players racing to secure advanced chips to build next-generation AI data centers. Microsoft, Nvidia, OpenAI, and Amazon have all increased their semiconductor orders to handle AI workloads.
But the catch? Those same expectations are now baked into stock prices, meaning even stellar results can trigger selling pressure.
Samsung’s Semiconductor Comeback: Regaining Lost Ground
For years, Samsung has played catch-up in the high-bandwidth memory (HBM) segment — a critical technology for AI accelerators that power large language models and generative AI systems.
Rival SK Hynix took an early lead, supplying most of the HBM3 chips used by Nvidia’s AI GPUs, effectively setting the benchmark in the premium AI memory space. However, Samsung’s recent progress has been noteworthy. The company secured a major order from AMD and is now awaiting Nvidia’s approval for its HBM3E chips.
Samsung and SK Hynix have also inked supply agreements with OpenAI’s Stargate project — a massive AI data infrastructure initiative expected to double the world’s total HBM demand in the next few years.
This marks a critical turning point: Samsung is back in the AI race, not just as a memory supplier, but as a strategic player in global AI infrastructure.
Analysts: The AI Boom Isn’t Over — But Hype Needs Reality Check
Market analysts agree that while Samsung’s fundamentals are improving, AI enthusiasm may be ahead of the data.
“To regain its previous market leadership, Samsung needs to carry this momentum into its next-generation product, HBM4,” said MS Hwang, Research Director at Counterpoint Research.
He noted that while HBM3E shipments to Nvidia are a positive sign, their volume impact remains limited compared to Samsung’s vast DRAM and NAND business. Still, as memory prices rise and utilization rates recover, Samsung’s margin expansion story remains intact.
The October 30 detailed earnings report will provide greater clarity, including net income and divisional breakdowns — key for gauging whether Samsung’s chip rebound is sustainable beyond 2025.
A Wider AI Arms Race: Context Beyond Korea
Samsung’s latest results come amid a global semiconductor arms race. As AI models get larger and more complex, companies across the U.S., China, and Europe are spending heavily to build computing capacity.
The AI infrastructure market is projected to grow at a compound annual rate of 35% through 2030, according to Deloitte, with HBM and advanced packaging at the heart of that expansion.
Meanwhile, trade tensions between the U.S. and China continue to shape the competitive landscape. With Washington restricting chip exports and Beijing doubling down on local production, South Korea’s role as a neutral manufacturing base has become even more critical.
“Samsung’s strategic advantage lies in its scale, supply chain depth, and diversification,” said Rita Lee, a semiconductor analyst at Mirae Asset Global Investments. “But in a hyper-competitive AI market, execution speed is everything.”
Investor Sentiment: Between Optimism and Overheating
Despite the short-term dip, Samsung remains a top pick for institutional investors betting on the long-term AI megatrend.
Dozens of analysts have recently raised their price targets, citing improving DRAM prices and surging AI demand. Some, however, warn of valuation risks after such a sharp rally.
Samsung’s current price-to-earnings multiple trades above its five-year average, reflecting the market’s belief that the AI cycle could deliver multi-year profit acceleration. But with such optimism already priced in, even a slight miss could trigger outsized volatility — exactly what happened this quarter.
Samsung’s AI Story Is Still Unfolding
Samsung’s latest earnings prove that the company has successfully navigated one of the toughest chip cycles in recent memory and positioned itself at the center of the global AI infrastructure boom.
However, the stock’s wobble shows that AI mania cuts both ways — investors now expect perfection, not just performance.
In the long run, Samsung’s commitment to advancing HBM4 and next-generation AI chips will determine whether it can reclaim full market leadership from SK Hynix and stay competitive against emerging players.
For now, Samsung remains both a pillar of the AI hardware revolution and a reminder that even in tech’s hottest sector, expectations can move faster than earnings.