AI Exhaustion? Samsung Earnings Beat Expectations But Stock Abruptly Reverses Kneejerk Gains

Samsung Electronics delivered another good quarter last night, underscoring that the AI infrastructure boom appears to continue to funneling enormous profits toward the companies supplying the memory chips powering. Shares were up 10% at one point but finished the session red.

The South Korean technology giant reported second-quarter revenue of 171.5 trillion won and operating profit of 89.5 trillion won, according to CNBC, beating analyst expectations of 79.3 trillion won and marking another record quarter. Operating profit surged more than eighteen-fold from a year ago, while revenue more than doubled, driven overwhelmingly by demand for AI memory.

The company's memory division once again carried the business, posting record DRAM and NAND sales as hyperscalers and enterprise customers continued racing to build AI infrastructure. According to CNBC, Samsung said it is rapidly expanding production of next-generation HBM4 memory, has already shipped its first HBM4E samples to major customers, and continues investing aggressively in new fabrication facilities and advanced research to keep pace with demand.

Samsung now believes industry supply constraints will likely persist through at least 2028 as AI workloads expand beyond today's large language models into increasingly compute-intensive agentic AI applications. The company said demand for general-purpose computing is accelerating alongside AI, while customers are increasingly seeking multi-year supply agreements to lock in memory capacity years in advance.

Samsung also indicated that AI infrastructure spending remains remarkably healthy heading into the second half of the year. Management expects continued strength across server DRAM, enterprise SSDs and high-bandwidth memory, noting it has already finalized supply agreements with five of the world's largest data center operators while negotiations continue with several more major customers.

Despite this, shares posted a loss for the day on Thursday as investors continue showing caution related to deals in the AI/hyperscaler space. Domestic rival SK Hynix reported record profits of its own earlier this week and also disappointed investors.

Per Reuters, SK Hynix posted operating profit of 60.5 trillion won, up more than six-fold from a year earlier, yet fell short of lofty Wall Street expectations after slower-than-anticipated HBM4 shipments delayed revenue recognition. Investors responded harshly, sending the shares sharply lower despite management insisting demand from AI customers remains exceptionally strong.

This could be starting to show just how unforgiving the AI trade has become. Neither company is describing weakening demand. Samsung sees chip shortages lasting until 2028, while SK Hynix says customers continue requesting additional memory supply and is signing five-year agreements to secure future business.