Samsung just reported Q2 preliminary results. Revenue missed. Operating profit beat. The memory complex sold off anyway.
The numbers: Q2 revenue KRW 171 trillion, 0.7% below consensus. Operating profit KRW 89.4 trillion, 2% above consensus. Operating margin 52.3%, up from 43% in Q1. Revenue grew 28% sequentially and 129% year over year. Operating profit grew 1,810% year over year.
Read that again. A company that grew operating profit 1,810% year over year with a 52.3% operating margin is being sold off because revenue missed by less than 1%.
The selloff across memory today:
Samsung: -6.9%
SNDK: -8.0%
WDC: -8.2%
SK Hynix: -6.1%
MU: -5.4%
STX: -5.3%
Three factors are driving the move.
First, the revenue miss raises demand destruction questions. Q2 sequential revenue growth decelerated from 42% in Q1 to 28% in Q2. Still exceptional growth but the rate of change slowed. The market is trading the second derivative.
Second, Samsung and SK Hynix both announced plans to build two new fabs each in South Korea as part of a $518 billion chip production ecosystem. That is a massive supply commitment that challenges the "tight beyond 2027" narrative. If both Korean memory giants are building four new fabs simultaneously, the supply side of the equation just shifted.
Third, the AI infrastructure spending resilience debate is intensifying. After weeks of tokenmaxxing concerns, OpenAI potentially delaying its IPO, and private software debt losses accelerating, the market is asking whether AI capex can sustain the memory pricing cycle.
Our read: put the YTD returns next to today's decline.
Samsung: +147% YTD, down 6.9% today
SNDK: +576% YTD, down 8% today
MU: +226% YTD, down 5.4% today
These are stocks that have doubled, tripled, and quintupled this year. A one-day pullback on a sub-1% revenue miss after a 1,810% operating profit increase is not a thesis change. It is profit-taking looking for a reason.
We published our MU analysis at $1,047 with a $1,521-$1,901 target range based on 12-15x FY27 EPS. The consensus price target is $1,576 with std_dev compressing from $421 to $329 post-earnings, meaning the Street is converging on our range with increasing conviction.
Samsung's operating profit beat tells you margins are expanding even as growth decelerates. Counterpoint Research confirms memory prices continue rising across consumer, mobile, server, and PC segments. The full earnings report drops July 30 with segment detail and management outlook.
One day of profit-taking does not unwind a supercycle. Watch MU's support at $1,000. If it holds, this is a buying opportunity. If it breaks, the supply narrative from four new Korean fabs needs to be re-evaluated.
The data says watch the price action, not the headline.
$MU $SNDK $DRAM
