Samsung Electronics Reports Record Earnings, Yet Shares Plummet: Why?

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Samsung Electronics has set a new record for its highest-ever earnings, but the stock market's reaction was the exact opposite. As foreign investors engaged in large-scale selling, Samsung Electronics' stock price plunged by as much as 10% at one point. This shock spread across the entire KOSPI, even triggering a circuit breaker that temporarily halted trading.

Reporter Kim Hye-min analyzes the reasons behind this.

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Samsung Electronics' stock price plummeted immediately after the market opened.

This occurred after the second-quarter earnings, which broke all previous records, had already been announced.

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

Regarding the sharp decline despite an earnings surprise that exceeded market expectations, the securities industry interprets it as a case of profit-taking following the pre-reflection of earnings expectations.

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 on 10 of those occasions, the stock price fell on the day of the announcement.

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

[Kim Dong-won / Head of Research, KB Securities: The KOSPI index has risen by nearly 90% since the beginning of the year. As it recorded the highest returns among global stock markets, it is inevitable to interpret that the pressure for profit-taking was 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, Korea Capital Market Institute: With companies like Micron, Kioxia, and Chinese semiconductor firms announcing large-scale investments, and Samsung Electronics and SK Hynix also announcing major investments, there are concerns that if semiconductor supply increases in the future, the pace of price growth will slow down.]

Global investment bank Morgan Stanley stated, "The weakness in U.S. semiconductor stocks could indicate a possibility that market capital is 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 confirm the intensity of future AI investment and demand.

(Reported by Seol Chi-hwan | Video edited 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.