Samsung's Preliminary Quarterly Profit Just Jumped 19-Fold -- and Micron Stock Fell on the News. Here's Why.
The most profitable quarter in the memory industry's history just knocked the sector's stocks lower.
Overview
Samsung Electronics (OTC: SSNLF) just issued preliminary results pointing to the most profitable quarter in its history. The South Korean electronics giant said Tuesday that it expects second-quarter operating profit of about 89.4 trillion won, or roughly $58 billion. That is a more than 19-fold jump from a year ago. And revenue is expected to come in around 171 trillion won, up about 129% year over year. The surge was driven by strong demand for high-bandwidth memory and high-capacity DRAM -- both fueled by heavy investment in artificial intelligence (AI) servers.
And memory stocks fell on the news. Samsung's own shares sank more than 10% at one point in Seoul on the news. Micron (NASDAQ: MU), the biggest U.S. memory maker, fell just as sharply. Storage specialists Western Digital and Sandisk slid right alongside it.
Details
A 19-fold profit jump from the world's largest memory chipmaker should have lifted the whole sector. Instead, it dragged the group lower. So, why the backward reaction?
Source
Originally published at www.fool.com.