Samsung profit boom sparks selloff in memory stocks and chips

Samsung Electronics said second-quarter operating profit climbed to about 89.4 trillion won on consolidated sales of roughly 171 trillion won under K-IFRS, but the stock still dropped as traders questioned how long the AI-fueled chip surge can last.

The guidance, released July 7, pointed to a 19-fold jump in operating profit from a year earlier and landed after investors had already wiped more than $100 billion from Samsung’s market value on concern that the AI boom may be harder to sustain than the market had assumed. Samsung said Korean disclosure rules do not allow it to give earnings estimates as a range, but the figures still marked an extraordinary quarter. The guided operating profit also exceeded Samsung’s combined earnings over the prior three years, a reminder of how far the company has run even as sentiment turned cautious.

That caution spilled quickly into other memory names. Micron Technology, SanDisk and Western Digital weakened overnight, while the Roundhill Memory ETF, which lists Samsung, SK Hynix and Micron among its top holdings, fell sharply. Micron and SanDisk each dropped about 4.5%, and Western Digital slid nearly 4%, as investors moved to reduce exposure to the same trade that has powered much of the year’s chip rally.

The selloff also highlighted a broader rotation in market psychology. Samsung’s numbers were strong enough to reinforce the AI investment story, but not strong enough to stop profit-taking in crowded winners after a long run-up in semiconductor valuations. Traders appeared to be shifting money into cheaper, less-loved sectors seen as less vulnerable to a sharp earnings surprise, a sign that optimism around chips may have outrun what investors were willing to pay for it. For now, Samsung’s blowout quarter has become less a signal of unbroken momentum than a stress test for how much good news the semiconductor trade can still absorb.