Samsung shares fall 5% as record quarterly profit meets high expectations

Samsung Electronics shares fell 5% after the South Korean technology company announced record third-quarter results on Thursday, October 29. Growing demand for advanced memory chips used in artificial intelligence applications supported the earnings, with operating profit broadly matching analysts' expectations.

Revenue reached 195.25 trillion won, or $124 billion, compared with an estimate of 195.79 trillion won. Operating profit was 107.44 trillion won, against a forecast of 107.66 trillion won. The comparisons were based on LSEG SmartEstimates, which give greater weight to analysts with more consistently accurate forecasts. Revenue increased 126.88% from a year earlier and 13.85% from the preceding quarter, while operating profit climbed 783.11% year on year.

Samsung said it was the first global technology company to exceed 100 trillion won in operating profit in a single quarter. It also reported that both revenue and profit had reached records for four consecutive quarters. The semiconductor division generated revenue of 147.1 trillion won and operating profit of 106.5 trillion won, reflecting strong demand for memory products tied to AI.

Within that division, the memory business recorded its highest quarterly revenue and operating profit. Samsung attributed the performance to a substantial increase in HBM4 sales and stronger demand for server solid-state drives. The company intends to expand sales of high-bandwidth memory, or HBM, used in AI chips, alongside memory products for servers and data storage, and secure long-term contracts to address growing demand.

Josh Gilbert, lead analyst for APAC at investment platform eToro, said investors' expectations for the AI trade had risen so far that record earnings were being treated as a minimum requirement. He pointed to the semiconductor business's contribution of nearly all Samsung's quarterly operating profit as evidence of its increasing dependence on memory chips, leaving its performance heavily exposed to memory prices.

Samsung announced third-quarter cash dividends totaling 30 trillion won, equivalent to 4,601 won for each common and preferred share. It also plans another 55 trillion to 75 trillion won in shareholder returns this year through dividends and share repurchases. The board is scheduled to determine the total returns and detailed execution plans at a meeting in late January 2027.

Looking ahead, Samsung expects investment in AI infrastructure to accelerate in 2027. It anticipates that the resulting increase in demand will put further pressure on memory supply.

During the third quarter, Samsung Electronics and five affiliates announced a combined $1 billion investment in KKR-backed Helix Digital Infrastructure, with Samsung Electronics contributing $500 million. The company also announced a partnership with French startup Mistral AI to apply AI technology to semiconductor activities, including chip design and manufacturing, and led Mistral's Series D funding round.