Why Did Samsung's Stock Price Not Rise Despite Record Quarterly Profit?

On the morning of July 30, Samsung Electronics announced its official financial report for the second quarter of 2026. Operating profit reached 89.5 trillion won. This figure is 19 times that of 4.68 trillion won in the same period last year and is also the highest quarterly operating profit in Samsung's history. Revenue was 171.5 trillion won, also a quarterly record high. Based on an exchange rate of 1 USD to 1500 won, the operating profit for this quarter is approximately 59.7 billion USD.

According to reports from the Korea Herald, this figure surpasses Nvidia's previous record for quarterly operating profit of 53.5 billion USD. A company that manufactures storage chips and smartphones has outperformed the most profitable company in this AI cycle in just one quarter.

Samsung's stock price reacted to this news with almost no movement. On July 30, the intraday quote was around 210,000 won, up 0.72%.

### How Far Is This Record from Normal?
The columns in the front row of the chart represent 2023, where Samsung's operating profits for the first and second quarters were 640 billion and 670 billion won, respectively, nearly zero. By the fourth quarter of 2025, this figure returned to 20.1 trillion won. In just another half year, it became 89.49 trillion won.

There are two reference points to help readers establish a scale. First, Samsung's total operating profit for 2025 was about 43.6 trillion won, meaning this quarter's profit is more than double that year's total. Second, this quarter's figure is 4.45 times the previous historical peak of 2025's fourth quarter.

The financial report also concealed a one-time expense. According to reports from Korea Financial News, this quarter included a provision of about 17 trillion won for performance bonuses in the semiconductor division, equivalent to 10.5% of operating profit. Yahoo Finance reported that if this bonus were excluded, operating profit would exceed 100 trillion won.

### Why Did the Stock Price Not React to This Record?
Because revenue did not meet expectations.
The consensus expectation was 172.68 trillion won, while the actual revenue was 171.5 trillion won. This is an unusual combination where profit exceeded expectations by about 4% to 6%, but revenue fell short.

Future Asset Securities explained the market's interpretation at that time to the Korea Times on July 8, stating that the market viewed Samsung's performance as "a late-cycle signal driven by price increases in chips rather than growth in shipment volume." This statement is the key judgment in this market cycle. Profit driven by price increases and profit driven by shipment volume look the same on the income statement but are entirely different in terms of cycle position. The former indicates supply tightness, while the latter indicates demand expansion, and supply tightness will eventually ease.

The official stance also supports this interpretation. The financial report stated that "the continued upward trend in prices across the industry also contributed to record performance," while also noting that both DRAM and NAND achieved historical highs in quarterly shipment bits. The specific growth in bits was not disclosed in the press release; that part was verbally disclosed during the conference call.

### How Much Momentum Is Left for Price Increases?
This chart uses SK Hynix's data, as it breaks down volume and price more finely. According to TradingKey's summary of SK Hynix's financial report on July 29, the average selling price of DRAM increased by about 60% quarter-on-quarter in the first quarter of this year, dropping to about 30% in the second quarter, while NAND decreased from about 70% to 50% to 55%.

The industry consensus points in the same direction. According to TrendForce data, the quarter-on-quarter increase in conventional DRAM contract prices fell from 93% to 98% in the first quarter of this year to 58% to 63% in the second quarter. The situation in the third quarter is that long-term contracts will suppress the increase, with ZDNet Korea reporting on July 3 that Samsung's DRAM price increase in the third quarter will be capped at 20%.

Prices are still rising, but the rate of increase is narrowing, which is the specific meaning of the term "late cycle."

It should be clarified that a slowdown in price increases does not equate to a decline. Samsung remains optimistic in its financial report about the second half of the year, stating that the storage business is expected to see "strong demand centered on servers, driven by continued investment in AI infrastructure capital expenditures," and that demand for server DRAM, enterprise SSDs, and HBM will accelerate.

### Where Are These Profits Coming From?
This quarter, the DS semiconductor division's operating profit was 89.2 trillion won, accounting for 99.7% of the group's total of 89.4924 trillion won. In the previous quarter, this ratio was 93.8%.

In the same table, the MX division, which sells mobile phones and network equipment, reported an operating loss of 700 billion won, while the entire DX division, which includes mobile phones, televisions, and home appliances, reported an operating loss of 800 billion won. In the previous quarter, MX still made a profit of 2.8 trillion won. The official explanation for MX is that revenue is growing year-on-year but is being suppressed by "rising component cost pressures."


This "component" is something it sells itself. Samsung's mobile division has to buy memory at the increased market price, while the profits from the price increases all go to the semiconductor division. From the group's perspective, this is an internal transfer, but it is not beneficial for the competitiveness of the mobile business.

The official statement also mentioned the foundry business, stating that before excluding the bonus provision, the profitability of the foundry business "significantly improved," driven by "strong demand for HBM bare chips and robust orders from U.S. customers." This means that even the recovery of the foundry business is being driven by storage demand.

### The Bills Are Sent to Others
The other half of the storage price increase is someone else's cost.
Microsoft's CFO Amy Hood provided a specific breakdown during a conference call on April 29, stating that approximately 250 billion USD of the 190 billion USD capital expenditures for the calendar year 2026 would come from the impact of rising component prices. According to Tom's Hardware, Meta also attributed its increase in capital expenditure limits by 10 billion USD during the same period to "higher component prices this year, especially for memory."

Qualcomm calculated this more directly in its financial report presentation materials on July 29. It stated that due to rising memory prices and supply constraints, it expects a year-on-year decline of about 20% in revenue from its Android mobile business for fiscal year 2026, which will drag down annual earnings per share by over 1.50 USD, and announced a price increase for its products starting September 1.

This creates a closed loop. Capital expenditures from cloud vendors drive up storage prices, which in turn boost profits in Samsung's semiconductor division, while also increasing costs for Samsung's mobile division and Qualcomm. The market is now concerned about the first link in this closed loop, namely whether cloud vendors can continue to increase their capital expenditures. Morgan Stanley's view after the financial report is that the correction in chip stocks is not yet over, as they expect cloud vendors to tighten capital expenditure controls.

### The Timeline for Stock Prices Needs to Be Revisited

The most widely circulated claim is that "Samsung's stock price fell 7% on the day of the financial report," but this statement misrepresents the timing. The 6.9% drop occurred on July 7, when Samsung issued its earnings forecast, closing at 296,000 won, with a maximum intraday drop of 10%. On July 30, the day of the official financial report, the stock price actually rose slightly.

The real issue lies between these two dates. On June 19, Samsung reached its historical highest price of 374,500 won, and by July 29, it closed at 208,500 won, a cumulative decline of 44.3%. In the meantime, something happened that had never occurred in the history of the Korean stock market; according to TradingKey statistics, the KOSPI index triggered a circuit breaker on July 28 and 29, marking the first time in history that the index triggered a circuit breaker on consecutive days.

This round of correction is partly not Samsung's fault. Statistics show that Samsung and SK Hynix together account for about 50% of KOSPI's market value, while this ratio was 25% at the end of 2025. Josh Gilbert, chief market analyst for eToro in Asia-Pacific and the Middle East, pointed out that the extremely high combined weight of the two makes it impossible for index investors to avoid a synchronous decline. Leverage funds have also amplified the volatility; according to the Korea Times, about 30 trillion won flowed into single-stock ETFs of Samsung and SK Hynix in the first week of July alone.

Contrary voices are also named. CLSA's strategists judged during this round of decline that "this is not the end of the story, but a pullback on the way up."

Earning a record profit that surpasses Nvidia in one quarter while the mobile division starts to incur losses in the same quarter are both results of the same round of price increases.

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