Samsung's 107 Trillion Won Quarter Outearned Nvidia, and Its Shares Fell 2.4 Per Cent Anyway

Seoul Economic Daily put the scale in context. In dollar terms Samsung's profit of about 80.1 billion dollars compares with 63.7 billion for Nvidia's latest quarter, 40.8 billion for Alphabet and 40.6 billion for Microsoft, and the only larger quarterly figure it cited was Saudi Aramco's 116 trillion won in the second quarter of 2022. The same report estimated that Samsung's device experience division, which makes finished products, lost about 2 trillion won in the quarter, squeezed by pricier memory components and a stronger won, and that industry officials expect up to 120 trillion won in the fourth quarter. Detailed results by division are due later this month.

Why did Samsung shares fall on record profit?

Several reasons, none of them about the quarter itself. The Korea Times reported that the shares were still about 30 per cent below their 19 June peak, even though they are up roughly 296 per cent since last September, and that foreign investors had been net sellers of Samsung stock for eight straight sessions since 28 September. Behind that sat the bond market: SBS said the US ten-year Treasury yield topped 5.36 per cent during Wednesday's session, its highest since 2002, with the 30-year near 5.73 per cent, and the Philadelphia Semiconductor Index fell 1.15 per cent overnight. Daishin Securities researcher Lee Kyung-min called it a sell-on-the-news reaction, and the market also had ETF rebalancing and options expiry to digest.

Not everyone saw a beat. Josh Gilbert of eToro told CNBC: "Samsung has delivered a record profit and still fallen short of expectations, which tells you just how demanding the AI trade has become." Nic Puckrin of Coin Bureau said the numbers left one question open, how long the memory boom can last, because memory has historically been a highly cyclical business.

What happens to memory chip stocks next?

Optimists point to the supply side. CLSA's Sanjeev Rana told the Korea Times that "this memory upcycle is bigger than all the previous cycles and will last longer as it will take time for the supply to catch up with demand." Douglas Kim of Douglas Research Advisory said investors were disappointed by the early announcement of 30 trillion won in dividends and 15 trillion won in buybacks for employee compensation and wanted more spent on cancelling shares.

Seoul's market is shut on Friday for the Hangeul Day holiday, so the next reading of the market on a record quarter comes on Monday, with the divisional breakdown still to follow later this month.