Samsung 19-Fold Profit Jump Overshadowed by AI Jitters

Samsung Electronics reported a 19-fold surge in first-quarter operating profit on Tuesday, driven by a recovery in memory-chip prices. The stock fell 5% as investors focused on warning signs in the artificial intelligence hardware cycle.

Operating profit came in at 6.6 trillion won ($4.8 billion), Samsung said in its earnings preview, up from 0.64 trillion won a year earlier. Revenue rose 12% to 71 trillion won. The memory division accounted for most of the gain, with DRAM and NAND prices recovering after a prolonged downturn.

Shares slid even as the headline number beat the average analyst estimate of 6.3 trillion won, according to data compiled by Bloomberg. Traders pointed to two concerns. Samsung has struggled to qualify its high-bandwidth memory chips for Nvidia's next-generation AI processors, a process that lags rival SK Hynix. Broader AI demand also faces uncertainty after hyperscaler spending plans this year disappointed some investors.

"The profit jump was expected," said Greg Roh, a senior analyst at Hyundai Motor Securities. "The market is looking past the quarter to HBM qualification and the pace of foundry orders."

Samsung's foundry business, which makes custom chips for clients like Qualcomm and AMD, reported lower utilisation rates. The company said it expects a gradual recovery in the second half of 2025 but gave no specific timeline for HBM3e approval from Nvidia.

The stock has fallen roughly 15% from its February high, erasing gains that had priced in a swift memory recovery. Foreign investors sold ₩1.2 trillion in Samsung shares over the past five sessions, exchange data show.

Samsung's full quarterly report, including net income and segment-level details, is due April 30.