Samsung Electronics Shares Plunge Despite Record-Breaking Earnings: Why?

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However, the stock market's reaction was the exact opposite. As foreign investors engaged in large-scale selling, Samsung Electronics' stock price plummeted by nearly 10% at one point. The company's earnings and its stock price moved in completely different directions.

Reporter Kim Hye-min has the story.

[Reporter]

Samsung Electronics' stock price began to plummet immediately after the market opened.

This occurred after the company had already announced its second-quarter earnings, which reached an all-time high.

The stock dropped by as much as 10% at one point before closing 6.9% lower.

Regarding the sharp decline despite an earnings surprise that exceeded market expectations, the securities industry suggests that the anticipation of strong performance had already been priced in, leading to profit-taking.

Samsung Electronics' stock price had risen by more than 10% in the two days leading up to the earnings announcement.

Previously, Samsung Electronics recorded earnings surprises in 16 quarterly reports since 2019, but the stock price fell on the day of the announcement in 10 of those instances.

Furthermore, as foreign investors continue to rebalance their portfolios by selling off some of the stocks that have risen, they used the earnings announcement as an opportunity to realize profits, which dragged the stock price down.

[Kim Dong-won / Head of Research at KB Securities: The KOSPI index has risen by nearly 90% since the beginning of the year. Since it recorded the highest return among global stock markets, it is inevitable to interpret this as the pressure for profit-taking being the strongest.]

While some diagnose this as a short-term correction, concerns persist that the semiconductor industry could slow down in the long term due to weakening demand and oversupply.

[Lee Hyo-seob / Head of Financial Industry Research at Korea Capital Market Institute: With Micron, Kioxia, and Chinese semiconductor companies announcing large-scale investments, and Samsung Electronics and SK Hynix also announcing significant investments, there are concerns that the pace of price increases will slow down as semiconductor supply increases in the future.]

Global investment bank Morgan Stanley stated, "The weakness in U.S. semiconductor stocks suggests that market funds may be shifting toward big tech companies that operate large-scale AI data centers."

The earnings announcements of U.S. big tech companies such as Meta, Microsoft, and Amazon, scheduled for the middle of this month, are expected to be key indicators to verify the intensity of future AI investments and demand.

(Reported by Seol Chi-hwan | Video by Park Ji-in | Graphics by Seo Seung-hyun and Kim Han-gil)
※ Please note: This article was translated by AI and may contain errors.