An 18-fold revenue leap would verify the reminiscence sector’s rally is being pushed by real earnings momentum moderately than hypothesis, reinforcing the trillion-dollar valuations now hooked up to Samsung, SK Hynix and Micron after triple-digit share good points this yr. Rising DRAM and NAND costs level to additional margin growth for reminiscence makers whilst they squeeze downstream companies like Samsung’s personal cell division, a rigidity more likely to present up in additional smartphone value will increase throughout the trade. The larger swing issue for the inventory response stands out as the scale of Samsung’s worker bonus provision, which might masks underlying power if accounting timing pulls reported earnings beneath the headline consensus determine, whereas any signal of cooling AI infrastructure spending stays the important thing draw back threat analysts are waiting for the sustainability of the present provide squeeze.
Samsung is predicted to put up an 18-fold leap in Q2 working revenue to a report 86 trillion gained, pushed by an AI-fuelled reminiscence scarcity, with analysts flagging bonus provisions and AI spending as key swing elements.
Abstract:
- Samsung is predicted to report second-quarter working revenue of 86 trillion gained ($56.35 billion), an 18-fold leap from 4.7 trillion gained a yr earlier and a 3rd consecutive report quarter
- The reminiscence scarcity driving the surge is predicted to persist not less than by way of subsequent yr, fuelled by demand for AI inference infrastructure that’s outpacing international provide development
- Citi Analysis stated DRAM and NAND common promoting costs rose 44% and 53% quarter-on-quarter respectively within the second quarter
- Samsung, SK Hynix and Micron shares have surged 158%, 273% and 242% respectively this yr, pushing all three corporations’ valuations above $1 trillion
- Analysts stated a larger-than-expected bonus provision, doubtlessly exceeding 40 trillion gained cumulatively, might trigger reported earnings to fall wanting consensus
- JPMorgan flagged the quickly rising share of AI reminiscence in cloud suppliers’ capital expenditure, estimated at 52% this yr and over 70% subsequent yr, as a threat to the growth’s sustainability
Samsung Electronics is more likely to report that its working revenue jumped roughly 18-fold to a different report excessive within the second quarter, as booming demand for AI-related reminiscence chips continues to outstrip international provide, in line with Reuters.
The world’s largest reminiscence chipmaker by gross sales is predicted to put up an working revenue of 86 trillion gained for the April to June quarter, primarily based on an LSEG SmartEstimate drawn from 30 analyst forecasts weighted towards these with the strongest observe information. That will mark a leap from 4.7 trillion gained a yr earlier and a 3rd straight quarter of report revenue, pushed by a chronic reminiscence scarcity as demand for AI inference infrastructure continues to outpace provide development from international producers. Analysts anticipate the reminiscence market to remain undersupplied not less than by way of subsequent yr. Progress has been fuelled not solely by high-bandwidth reminiscence but in addition by stronger demand for standard DRAM and NAND merchandise, as agentic AI programs, which carry out extra complicated, multi-step duties, require extra reminiscence and storage capability past what earlier AI training-focused purposes wanted.
Samsung provides reminiscence chips to main expertise corporations together with Nvidia, Google and Apple, and the value good points have been steep: Citi Analysis stated common promoting costs for DRAM and NAND rose 44% and 53% quarter-on-quarter respectively within the second quarter. The scarcity has fuelled a pointy rally in reminiscence chipmaker shares, with Samsung, SK Hynix and Micron up 158%, 273% and 242% respectively this yr, pushing all three corporations’ market valuations above $1 trillion.
Regardless of the sturdy working backdrop, analysts cautioned that reported earnings might fall wanting consensus if Samsung books a larger-than-expected provision for worker bonuses. In late Could, the corporate averted a large-scale strike by agreeing to allocate 10.5% of its semiconductor division’s working revenue to particular bonuses for chip staff, with some analysts estimating cumulative bonus provisions might exceed 40 trillion gained, making the timing of that accounting recognition a key variable for the quarter. Samsung is because of announce detailed earnings later this month.
Wanting forward, analysts see potential delays to AI infrastructure funding as the largest threat to the present reminiscence growth. JPMorgan famous that whereas traders broadly agree reminiscence provide and demand fundamentals stay tight, many query whether or not AI reminiscence’s quickly rising share of cloud service suppliers’ capital expenditure, estimated at 52% this yr and anticipated to exceed 70% subsequent yr, is sustainable. Any pullback in AI spending might weigh on Samsung and SK Hynix, each of which just lately pledged a mixed 3,200 trillion gained to develop chip capability in South Korea, with Samsung planning its funding between 2026 and 2040. Nomura expects commodity DRAM costs to rise an extra 24% and NAND costs 25% within the third quarter, whereas Samsung’s cell enterprise faces its personal squeeze, with rising reminiscence prices consuming into margins regardless of latest smartphone value will increase and analysts anticipating additional value hikes could also be wanted later this yr.
