Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Why Samsung shares are swinging so wildly
The KOSPI and Kosdaq indexes are displayed in the dealing room of Hana Bank in Seoul, Wednesday. The benchmark KOSPI closed at 7,246.79, down 5.35 percent from the previous session, while the secondary Kosdaq closed at 785.00, down 5.56 percent. Yonhap
By Lee Yeon-woo
Stock price falls another 6.25% despite record-high Q2 earnings
Samsung Electronics shares have taken investors on a wild ride over the past year, climbing from a July 9, 2025, low of 60,200 won ($40.12) to a June 19 peak of 374,500 won — a whopping 522 percent gain.
But a closer look shows just how dizzying the swings have been. Last week alone, the stock moved down 4.86 percent, up 3.41 percent, down 5.84 percent, down 9.06 percent and up 8.22 percent over five straight trading days.
This week brought another bout of whiplash around Tuesday's preliminary second-quarter earnings release, with the shares moving up 2.75 percent, down 6.92 percent and down 6.25 percent over three consecutive sessions.
The swings are raising a bigger question for investors: Why are shares of Korea's most valuable company trading less like a national champion and more like a momentum bet?
Analysts say the volatility reflects a shift in how the market is valuing Samsung. Rather than treating the company as a stable manufacturing giant, investors are increasingly pricing it as a cyclical artificial intelligence (AI) play tied closely to the memory chip cycle.
Samsung still makes smartphones and home appliances, but its performance is now driven largely by semiconductors, a business known for sharp boom-and-bust cycles. Profits can surge when supply is tight, only for prices and margins to collapse once capacity catches up and demand cools. With the shares already trading near record highs, investors have become quick to punish even minor signs of weakness.
"The market interpreted Samsung Electronics' recent earnings strength as a classic late-cycle signal, driven more by higher chip prices than by stronger shipment growth," said Seo Sang-young, an analyst at Mirae Asset Securities. "Warnings from global investment banks that semiconductor earnings momentum was losing steam gave investors the excuse they needed to take profits."
Samsung again projected record earnings for the second quarter, forecasting operating profit of 89.4 trillion won and sales of 171 trillion won. The profit estimate even surpassed record quarterly operating profits posted by global technology giants Nvidia and Apple. Still, foreign investors sold 1.8 trillion won worth of Samsung shares in a single session after the announcement Tuesday.
The rapid growth of leveraged exchange-traded funds (ETFs) is also magnifying the stock's moves. To maintain their target leverage, the products rebalance near the market close, buying into rallies and selling into declines. Those mechanical flows can amplify price moves when volatility rises.
Investors are still piling in. More than 3 trillion won has flowed into 2x single-stock leveraged ETFs tied to Samsung Electronics and SK hynix over the past week alone. Local brokerages, meanwhile, continue to raise their target prices, arguing that earnings prospects for Korea's chipmakers remain solid and that demand remains intact.
For now, market watchers say strong earnings may not be enough to silence concerns that the AI cycle is nearing a peak. Samsung's July 30 conference call could become the next catalyst, depending on what the company says about memory supply, demand and long-term contracts.
"Even if the AI growth story remains intact, volatility is bound to increase as the market is already highly leveraged and heavily positioned," said Lee Young-ju, an analyst at Hana Securities.
On Wednesday, the benchmark KOSPI plunged 5.35 percent to close at 7,246.79, while the secondary Kosdaq slid 5.56 percent to 785.00. As volatility intensified in the domestic stock market, sell-side sidecar trading curbs were triggered in succession on the KOSPI and Kosdaq markets at 1:31 p.m. and 1:33 p.m., respectively.
Foreign investors bought a net 335.6 billion won worth of KOSPI shares, but retail and institutional investors sold 45.1 billion won and 337.7 billion won, respectively, dragging the index lower.
Chip stocks remained under pressure after Samsung Electronics' post-earnings sell-off deepened concerns over the sector outlook, with Samsung down 6.25 percent, SK hynix falling 5.68 percent and SK Square sliding 6.34 percent.