Samsung's Memory Supercycle Hits Midpoint: Record $55.9 Billion Profit on Tap as Stock Shows Caution
Published on 07/06/2026 at 07:54 | Redaktion boerse-global.de
South Korea is preparing to channel the tax bonanza from its semiconductor boom into a state-backed future fund, as Samsung Electronics gears up to report what may be the most profitable quarter in corporate history outside the oil patch. The combined operating profits of Samsung and rival SK Hynix are expected to exceed 600 trillion won ($430 billion) in 2026, according to government projections, prompting Seoul to launch initiatives in artificial intelligence, advanced manufacturing, and housing. The announcement follows reports that the two chip giants plan to invest roughly 800 trillion won in a new semiconductor cluster in the Honam region.
At the center of this storm is Samsung, which is set to release preliminary second-quarter results on July 7. The market consensus points to an operating profit of around 85.5 trillion won ($55.9 billion), a figure that would more than double the quarterly records of Nvidia ($53.5 billion) and Apple ($50.85 billion). Meritz Securities sees even more upside, positing that a figure as high as 99.3 trillion won is possible if the company strips out provisions for employee success bonuses. Those bonuses, estimated at 16 trillion to 19 trillion won, are weighing on the headline number, but even the base consensus would vault Samsung into second place among the world’s most profitable companies, trailing only Saudi Aramco.
The earnings explosion is driven by a supercycle in memory chips that Meritz argues has only reached its midpoint. DRAM prices surged more than 40% in the quarter, while NAND flash prices climbed up to 60%, fueled by insatiable demand for high-bandwidth memory (HBM) used in AI servers. Analysts expect the HBM market to remain undersupplied at least through the end of 2027. Samsung is strengthening its position by locking in long-term contracts, which now account for 40% of its orders, and it is already pushing for further price increases of around 20% on DRAM contracts in the third quarter. Consumer electronics makers are pushing back, but tight supply gives Samsung the upper hand.
Should investors sell immediately? Or is it worth buying Samsung Electronics?
Despite the extraordinary earnings trajectory, Samsung’s stock has been sending mixed signals. Shares closed last Friday at 309,500 won, down 4.18% over the previous week and 5.93% over the past month. The stock sits 17.36% below its 52-week high of 374,500 won, reached on June 19. That caution stands in stark contrast to the longer-term performance: the stock has gained 145% year-to-date and an eye-popping 407.36% over the past twelve months. The 14-day relative strength index of 48.1 points to neutral sentiment, suggesting many investors are waiting on the sidelines for the actual earnings release.
Valuation remains a key point of debate. Samsung trades at a forward price-to-earnings multiple of just 5.7, a discount to rival Micron’s 7 times. Meritz Securities has set a 12-month price target of 500,000 won, implying further upside of more than 60% from current levels. The investment bank sees the semiconductor division alone fueling the momentum, with the chip unit potentially contributing a substantial portion of the group’s profit.
Production capacity further underscores Samsung’s scale. Its DRAM output runs at 650,000 to 700,000 wafers per month, roughly double Micron’s. That manufacturing muscle, combined with the shift to long-term contracts, is adding stability to a traditionally volatile market.
Two catalysts loom in the near term. First, the July 7 earnings announcement will test whether the market has fully priced in the earnings surge. Second, on July 10, SK Hynix will debut on the Nasdaq, likely reinforcing the rich valuations assigned to AI-memory players. For Samsung shareholders, the disconnect between fundamental strength and recent price weakness may soon resolve—and if Meritz is right, the supercycle still has a long way to run.
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