The memory bubble appears to be rapidly deflating.
After the semiconductor/memory sector was walloped in Monday US trading without any clear negative catalyst, the semiconductor-chasing world was eagerly waiting to hear what Samsung - the world’s largest memory maker - would report in its preliminary Q2 earnings report as investors sought to justify sky-high investments and valuations around AI. In the end, it was not good enough, and the stock is down 5% at last check.
Samsung Electronics’s quarterly profit surged 19-fold due to relentless demand for memory chips needed in AI data centers. For the 3 months ended June 30, the company reported preliminary operating income of 89.4 trillion won ($58 billion) not only beating the median analyst estimate of 84.2 trillion won, but dwarfing its performance for all of 2025. Revenue more than doubled to 171 trillion won, also modestly beating expectations (Samsung will release a full financial statement, including net income and divisional breakdowns, around the end of the month).
Yet while the historicals were clearly strong, they were not strong enough for a company that had been priced beyond perfection, and where it didn't take much to disappoint investors just looking for a hint to take profit. And they go it:
- *SAMSUNG DROPS 4.5% IN PRE-MARKET ON NEXTRADE AFTER 2Q GUIDANCE
Indeed, investors had harbored extremely high hopes for Samsung, its peer SK Hynic and other chipmakers that are posting unprecedented profit margins thanks to a historic buildout of AI infrastructure worldwide. Yet that capex buildout is likely ending, after META lobbed the first shot across the bow of unlimited capital spending last week and sparked the biggest 2-day selloff of high beta momentum stocks since covid.
“We will be looking for signs that this
