'No one expected these profits'. How the AI boom drove Samsung's stock to a record high

Samsung Electronics shares hit an all-time high after the company unexpectedly reported its biggest quarterly profit in more than three years. This result was a quarter better than the market expected. Since the beginning of the summer, the South Korean giant's capitalization has soared by more than 60% amid signs of recovery in its key semiconductor business.

South Korea's largest company said on Oct. 14 that preliminary data showed its operating profit in the third quarter of 2025 soared 32% to 12.1 trillion won ($8.5 billion). Analysts' consensus forecast called for the figure to be 9.7 trillion won. Revenue rose 9% to 86 trillion won ($60.3 billion). Samsung will release a full financial report with net income data and a breakdown by division on October 30.

Shortly after the opening of trading in Seoul, the company's shares jumped 3% to a record 96,000 won ($67.3). However, they later lost more than 2% on the back of a broad drawdown in Asian stock markets due to the escalating confrontation between China and the United States. On October 14, a spokesman for China's Ministry of Commerce said the White House should not push for trade talks and threaten at the same time - keeping markets on edge, Reuters reported.

"Samsung's operating profit was much higher than anyone expected," CLSA Securities Korea analyst Sanjeev Rana told Bloomberg news agency. - Samsung's high-bandwidth memory (HBM) chip shipments have rebounded, up 70-80% quarter-on-quarter, and there's a possibility that the size of write-downs in contract chip production were much lower than forecasts."

Investors are betting that Samsung can catch up with SK Hynix in the lucrative market for supplying HBM to Nvidia and other companies that use the high-speed memory in their neural network chips. Thanks to rising demand and prices for traditional DRAM and NAND memory, Samsung has likely regained its place as the top memory chip maker by revenue, but its share of HBM shipments to Nvidia in total sales is still small, warned Counterpoint research director Ma. S. Hwang.

Samsung's shares have risen 62% since the beginning of June. This was helped by signs of recovery in the key semiconductor business, which traditionally brings the company from 50% to 70% of annual profits. In October, Samsung and SK Hynix signed agreements to supply chips for the OpenAI Stargate data center construction project. The projected demand under the project is more than double the world's existing HBM production capacity.

That, along with rising memory chip prices, prompted dozens of analysts to recently raise their target prices on Samsung shares, Bloomberg notes. According to FactSet, the majority on Wall Street recommends the South Korean giant's securities to buy, with a consensus rating of "above market" (Overweight). The average target price of 102.1 thousand won ($71.6) per share calculated by the service implies a 9% rise in the company's quotations to the closing level on October 13.

Samsung's current success comes after a series of design blunders that allowed SK Hynix to significantly pull ahead in the high-margin AI space. Reporting its second-quarter financial results to investors in July, Samsung said it expected to "significantly expand" its production of HBM memory chips for servers in the second half of the year.

This article was AI-translated and verified by a human editor