$SAMSUNG #SamsungQ3OperatingProfitSurges782.5%
Samsung Electronics reported a preliminary third-quarter operating profit of 107.4 trillion won, or roughly $80.1 billion, an increase of 782.5% from the same period a year earlier. It is the first time a South Korean company has surpassed 100 trillion won in quarterly operating profit, and the fourth consecutive record quarter for the world's largest memory chipmaker. Revenue for the July-to-September period came in at approximately 195 trillion won, up 126.59% year over year.
The driver behind the surge is memory. Demand for high-bandwidth memory and server DRAM has outpaced supply as data centers powering artificial intelligence expand. Samsung's HBM bit shipments jumped nearly 50% quarter over quarter, and HBM4 revenue more than tripled from the previous quarter. The company's HBM market share rose from 21% in the first quarter to 33% in the second quarter, and its HBM4 chips are set to supply Nvidia's Vera Rubin AI accelerator in the second half of 2026. Analysts at SK Securities estimate the operating margin for Samsung's memory division reached 76% in the third quarter, unchanged from the prior quarter and among the highest levels the business has recorded.
The earnings beat expectations. The consensus estimate compiled from brokerage reports was around 105.4 trillion won for operating profit, and the actual figure came in above that mark. Samsung Securities, Meritz Securities, and KB Securities have set target prices for the stock at 400,000 won, while Hanwha Investment & Securities and SK Securities have targets as high as 580,000 won and 610,000 won respectively. Analysts at Meritz noted that DRAM prices are likely to rise further next year, and KB Securities projected that Samsung's HBM average selling price will more than double year over year in 2027, with HBM4 rising from 40% of total HBM revenue this year to 80% next year.
The market's reaction, however, did not match the strength of the earnings. The KOSPI closed 2.62% lower at 6,625.93, and Samsung shares fell about 1.5% after initially rising at the opening. The decline was attributed to a combination of factors, including the end of Samsung's share buyback program, the expiry of options, and a rebalancing of semiconductor exchange-traded funds. Foreign and institutional selling pressure weighed on the index despite the record results. The divergence between the earnings report and the stock price reflects the fact that the market had already priced in strong results, and investors were focused on what comes next rather than what had already been delivered.
The full earnings report, including divisional breakdowns and a conference call with management, is scheduled for October 29. That release will provide more detail on the memory business, the foundry division, and the company's outlook for the fourth quarter and beyond. For now, the preliminary figures confirm that the memory cycle is still expanding, driven by demand that has not yet shown signs of slowing. The question going forward is whether that demand remains strong enough to sustain the current pace of earnings growth, or whether the market's cautious reaction reflects concerns about the durability of the cycle.
This article is not investment advice. Analysis is based on publicly available information and does not guarantee future outcomes.
Samsung Electronics reported a preliminary third-quarter operating profit of 107.4 trillion won, or roughly $80.1 billion, an increase of 782.5% from the same period a year earlier. It is the first time a South Korean company has surpassed 100 trillion won in quarterly operating profit, and the fourth consecutive record quarter for the world's largest memory chipmaker. Revenue for the July-to-September period came in at approximately 195 trillion won, up 126.59% year over year.
The driver behind the surge is memory. Demand for high-bandwidth memory and server DRAM has outpaced supply as data centers powering artificial intelligence expand. Samsung's HBM bit shipments jumped nearly 50% quarter over quarter, and HBM4 revenue more than tripled from the previous quarter. The company's HBM market share rose from 21% in the first quarter to 33% in the second quarter, and its HBM4 chips are set to supply Nvidia's Vera Rubin AI accelerator in the second half of 2026. Analysts at SK Securities estimate the operating margin for Samsung's memory division reached 76% in the third quarter, unchanged from the prior quarter and among the highest levels the business has recorded.
The earnings beat expectations. The consensus estimate compiled from brokerage reports was around 105.4 trillion won for operating profit, and the actual figure came in above that mark. Samsung Securities, Meritz Securities, and KB Securities have set target prices for the stock at 400,000 won, while Hanwha Investment & Securities and SK Securities have targets as high as 580,000 won and 610,000 won respectively. Analysts at Meritz noted that DRAM prices are likely to rise further next year, and KB Securities projected that Samsung's HBM average selling price will more than double year over year in 2027, with HBM4 rising from 40% of total HBM revenue this year to 80% next year.
The market's reaction, however, did not match the strength of the earnings. The KOSPI closed 2.62% lower at 6,625.93, and Samsung shares fell about 1.5% after initially rising at the opening. The decline was attributed to a combination of factors, including the end of Samsung's share buyback program, the expiry of options, and a rebalancing of semiconductor exchange-traded funds. Foreign and institutional selling pressure weighed on the index despite the record results. The divergence between the earnings report and the stock price reflects the fact that the market had already priced in strong results, and investors were focused on what comes next rather than what had already been delivered.
The full earnings report, including divisional breakdowns and a conference call with management, is scheduled for October 29. That release will provide more detail on the memory business, the foundry division, and the company's outlook for the fourth quarter and beyond. For now, the preliminary figures confirm that the memory cycle is still expanding, driven by demand that has not yet shown signs of slowing. The question going forward is whether that demand remains strong enough to sustain the current pace of earnings growth, or whether the market's cautious reaction reflects concerns about the durability of the cycle.
This article is not investment advice. Analysis is based on publicly available information and does not guarantee future outcomes.
