Samsung Electronics Co. Ltd. (USOTC:SSNHZ) reported stronger-than-expected second-quarter earnings on Thursday, as surging demand for artificial intelligence memory chips helped lift profit and revenue to record levels despite ongoing weakness in parts of its consumer electronics business.
The results initially pushed Samsung shares as much as 7% higher before gains faded, leaving the stock little changed amid a volatile trading session in South Korea. The broader KOSPI index also experienced sharp intraday swings.
AI Chip Demand Lifts Earnings to Record Levels
Net profit for the three months ended June 30 climbed to 71.27 trillion won ($49.2 billion), exceeding the Bloomberg consensus estimate of 68.36 trillion won.
Operating profit surged to 89.4 trillion won, up 19-fold from a year earlier and in line with the company’s previously issued guidance.
Quarterly revenue reached a record 171.5 trillion won, reflecting continued strength across Samsung’s memory chip operations.
Earlier this month, Samsung had already signalled a substantial increase in second-quarter earnings, pointing to accelerating demand for advanced memory products used in artificial intelligence applications.
Memory Business Offsets Consumer Electronics Weakness
Strong sales of AI-related memory chips helped compensate for softer results in Samsung’s smartphone and consumer electronics divisions, where higher component costs and weaker consumer spending continued to pressure performance.
Looking ahead, the company expects “robust demand centered on servers stemming from continued AI infrastructure capex and broader adoption of agentic AI” during the second half of 2026.
Samsung also said the global memory market is expected to remain “undersupplied” even as demand from consumer electronics and personal computers moderates.
“Despite efforts to increase production, supply constraints are expected to continue,” Samsung said.
Samsung Expands AI and Foundry Strategy
The company said it will continue prioritising higher-margin memory products, including high bandwidth memory (HBM), to meet growing demand from AI customers.
Samsung also plans to increase production capacity within its foundry business. During its post-earnings conference call, company executives said they expect the number of projects involving 2-nanometre chips to more than double on an annual basis during 2026.
Investors Assess AI Valuations
Rapid growth in AI-related memory demand has been a major driver of Samsung’s recent earnings expansion, with constrained supply supporting higher prices for advanced memory products.
However, enthusiasm surrounding AI-linked semiconductor stocks has moderated in recent weeks as investors question whether the sector can sustain the exceptional pace of growth seen over the past year.
Samsung also stated that it is not currently considering an American Depository Receipt (ADR) listing. The topic drew attention following rival SK Hynix Inc.’s (NASDAQ:SKHY) high-profile U.S. listing in July.