[Edaily Reporter Kim Kyung-eun ] Although SamsungElectronics(005930)posted second-quarter results that exceeded market expectations, its stock price plummeted by nearly 7%. This is believed to be due to a flood of profit-taking as the stock had already risen sharply ahead of the earnings announcement, with market expectations already priced in. However, the prevailing view among securities analysts is that this correction should be viewed as a buying opportunity, based on the memory market conditions and the company’s competitive strength.

According to MP Doctor, SamsungElectronics closed at 296,000 won on the 7th, down 22,000 won (6.92%) from the previous trading day. On that day, SamsungElectronics reported a preliminary second-quarter operating profit of 89.4 trillion won, an “earnings surprise” that exceeded the market consensus (the average of securities firms’ forecasts) of 85.0494 trillion won. However, a “sell-on” phenomenon occurred, in which the stock price fell despite the positive news.

Kang Jin-hyuk, a senior analyst at Shinhan Investment Securities, analyzed, “Just as panic selling occurred following Micron Technology’s recent earnings surprise, preemptive profit-taking emerged as concerns grew that SamsungElectronics’ record-breaking profits might have peaked.”

Some analysts also suggest that market expectations, which had risen higher than the actual results, acted as a burden. Kim Seon-woo, an analyst at Meritz Securities, said, “While the memory division delivered better-than-expected results, it is estimated that factors leading to underperformance emerged in the Device Experience (DX) division,” adding, “The significant contribution to losses from the DX division fell short of some investors’ vague expectations.”

The securities industry generally agrees that this week’s stock price decline is not due to a deterioration in fundamentals. Rather, analysts predict that earnings forecasts will continue to be revised upward, driven by expanding demand for artificial intelligence (AI) memory. There is also a view that the semiconductor supercycle has not yet even reached its midpoint.

Analyst Kim emphasized, “The situation where memory supply falls far short of keeping pace with the growth in demand is expected to persist at least through the fourth quarter of next year,” adding, “Looking back at past cycles, memory companies’ earnings improved even more dramatically when price increases and volume expansion overlapped around the mid-cycle point; we believe this period will occur between the fourth quarter of this year and the second quarter of next year.”

Additional momentum is also expected to continue, driven by SamsungElectronics’ share buybacks and rising average selling prices (ASPs) for High-Bandwidth Memory (HBM). Ryu Hyung-geun, an analyst at DaishinSecurities, “Since provisions for performance bonuses were reflected in the first and second quarters, we expect the resumption of share buybacks aimed at rewarding employees,” noting, “This is a development that could increase the stock price’s downside rigidity.” He added, “Next year’s HBM ASP is projected to rise 91% compared to this year,” and stated, “Based on our ASP advantage over competitors, we will narrow the profitability gap.”