Samsung’s Q3 Profit Soars on Robust AI Memory Chip Demand, Yet Shares Edge Down

South Korean tech behemoth Samsung Electronics announced its third-quarter earnings on Thursday, revealing an operating profit that largely aligned with analysts' projections. Despite the impressive figures, the company's shares concluded the day 4.13% lower, having recovered slightly from an earlier dip of as much as 5%.

The company reported an operating profit of 107.44 trillion won, which was just shy of the 107.66 trillion won LSEG SmartEstimates. However, this represented a staggering 783.11% jump year-on-year. Revenue also surged by 126.88% year-on-year to 195.25 trillion won ($124 billion), slightly below the expected 195.79 trillion won, and rose 13.85% from the preceding quarter.

Samsung announced a 30 trillion won cash dividend for the third quarter, equating to 4,601 won per common and preferred share. The company further outlined plans to return an additional 55 trillion to 75 trillion won to shareholders this year through various channels, with final decisions expected by late January 2027.

Remarkably, Samsung became the first global technology firm to exceed 100 trillion won in quarterly operating profit, simultaneously achieving record revenue and profit for the fourth consecutive quarter. Its semiconductor division was a significant contributor, reporting 147.1 trillion won in revenue and 106.5 trillion won in operating profit, largely fueled by robust demand for AI-related memory chips. The memory business also posted record quarterly revenue and profit, boosted by a substantial increase in HBM4 sales and growing demand for server solid-state drives.

The market still was not impressed.

Josh Gilbert

APAC Lead Analyst, eToro

Despite these record-breaking achievements, Josh Gilbert, lead analyst for APAC at investment platform eToro, noted the market's subdued reaction. "Investors have been so spoilt by the AI trade that a record result is now treated as the bare minimum rather than a reason to celebrate," Gilbert explained. He emphasized that Samsung's chip business accounted for nearly all of its operating profit, underscoring a growing dependence on memory chips. "For all the talk of Samsung being a diversified giant, anyone holding the stock today is really holding a memory maker with a phone business attached," he added, highlighting the company's increasing reliance on memory prices for its financial performance.

Looking ahead, Samsung anticipates an acceleration in AI infrastructure investment in 2027, which is expected to further tighten memory supply due to rising demand. The company intends to boost sales of High Bandwidth Memory (HBM), essential for AI chips, as well as other memory products for servers and data storage.

In related strategic moves during the third quarter, Samsung Electronics and five of its affiliates jointly committed $1 billion to KKR-backed Helix Digital Infrastructure, with Samsung Electronics contributing $500 million. The tech giant also forged a partnership with French AI startup Mistral AI to integrate AI technologies into its semiconductor operations, including chip design and manufacturing, and led Mistral's Series D funding round.