On July 7, 2026, the Korea Composite Stock Price Index (KOSPI) opened sharply lower and plunged by more than 4% at one point during the session. Samsung Electronics, a heavy-weight stock, led the decline, with its intraday drop widening to as much as 7.5%. As of the time of publication, Samsung Electronics’ decline was still maintained at more than 7%.

The fuse behind the sell-off was precisely an earnings preview that can be described as “explosive.” Samsung Electronics’ preliminary second-quarter financial results released that day showed consolidated revenue of 171 trillion won (about $111.8 billion), up 129.3% year-on-year; operating profit reached 89.4 trillion won (about $58.4 billion), up 1,810.2% year-on-year. Not only did this number far exceed analysts’ average expectation of 84.2 trillion won, it also meant that its quarterly profit alone surpassed the total profit for the three years from 2023 to 2025. Samsung has set a new quarterly profit record for three consecutive quarters.

Record-breaking earnings were achieved, yet the stock price suffered a severe setback. What logic is hidden behind this seemingly contradictory market reaction?

Did expectations get ahead of earnings in advance, so that “good news has been fully priced in” becomes “good news is a sell signal”?

Samsung Electronics’ performance was not “below expectations”; rather, market expectations had already run ahead of the earnings. Before the financial report was released, Wall Street’s consensus expectation for Samsung’s second-quarter operating profit was about 86 trillion won, and some brokerage firms even predicted as high as 90 trillion to 100 trillion won. When the actual figure of 89.4 trillion won landed, although it exceeded the 84.2 trillion won…