What could shape Samsung's growth in the coming quarters?

Samsung Electronics has projected a 19-fold jump in second-quarter operating profit, comfortably beating market expectations. The company also expects record revenue, driven by robust demand for memory chips used in artificial intelligence (AI) applications. The results mark Samsung's third straight quarter of record earnings, highlighting the continued strength of the AI-driven semiconductor cycle. (Sources: Reuters, CNBC, Invezz)

Strong demand for DRAM and NAND flash memory chips will be the key driver of Samsung's earnings growth. Tight industry supply, as chipmakers prioritise production of AI-focused high-bandwidth memory (HBM), has pushed memory prices higher. Continued investments in AI data centres by major global technology firms have further supported the company's semiconductor business.

Despite reporting record preliminary earnings, Samsung's shares fell sharply as investors shifted their focus to future growth prospects. Markets are becoming increasingly concerned that the AI-led semiconductor boom may be nearing its peak. Investors are also questioning whether the current pace of AI infrastructure spending by major technology companies can be sustained over the longer term.

Apart from valuation worries, analysts pointed to sizeable employee bonus provisions in Samsung's semiconductor division, which weighed on reported profitability. Investors are also watching for the risk of oversupply as global chipmakers continue to expand manufacturing capacity. Meanwhile, Samsung's foundry and logic chip businesses are still expected to face challenges despite the strong performance of its memory business.

Samsung is scheduled to release its detailed second-quarter earnings later this month, which will provide greater insight into the performance of its various business segments. Investors will closely monitor memory chip pricing, demand for AI-related semiconductors, and the company's progress in expanding its AI chip and foundry businesses. The outlook for Samsung will largely depend on whether global AI investment remains strong in the coming quarters.