Top line
Samsung shares hit a three-year high on Friday after the South Korean tech giant forecast a 15-fold increase in second-quarter operating profit from the same period last year, as the global boom in artificial intelligence boosts demand for advanced computer chips.
Samsung shares hit a three-year high.
Highlights
Shares of Seoul-based Samsung Electronics, the flagship unit of South Korean conglomerate Samsung Group, rose 3 percent on Friday, reaching 87,100 Korean won per share (about $63) at market close.
This is the highest peak reached by Samsung Electronics shares since early January 2021 and comes after the company released its profit forecast for the second quarter of this year.
Samsung said it expects to make a profit of about 10.4 trillion Korean won for the second quarter of 2024, or about $7.5 billion.
The figure, up from 670 billion won (about $500 million) a year earlier, beat analysts’ expectations and represented a 15-fold increase from a year earlier, while also far surpassing first-quarter profit of 6.61 trillion won ($4.8 billion).
Samsung said it expects to generate 60 trillion won ($43.5 billion) in sales revenue in the second quarter of this year, an increase of nearly a quarter from the same period last year.
What should you pay attention to?
Samsung hasn’t released much information on its second-quarter revenue guidance, but the impressive forecast is likely due to the strong performance of its semiconductor division. Samsung is one of the world’s largest computer chipmakers, and strong demand for artificial intelligence has driven up chip prices, particularly high-end chips that can be used to power AI products and data centers. Samsung itself has attributed its expected growth this year to broader optimism about AI, and in particular interest in generative AI, or the type of AI that powers tools like ChatGPT, Gemini, Claude, and Copilot. In addition to helping Samsung recover from a difficult crisis related to the COVID-19 pandemic, the AI boom has propelled other chip and AI companies to stratospheric heights. Notable among these is US chipmaker Nvidia, which has quickly grown from a relatively niche maker of hardware primarily used by gamers to one of the world’s most valuable companies with a market capitalization of over $3 trillion. Nvidia was briefly the world’s most valuable public company by market capitalization, but is now the third most valuable behind Microsoft and Apple.
What should you pay attention to?
Samsung is expected to release a more detailed earnings report for its second quarter at the end of July.
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News Source : www.forbes.com
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