Samsung Electronics, which faced mechanical portfolio rebalancing amid the global Artificial Intelligence (AI) semiconductor rally, is approaching a supply-demand turning point ahead of its largest-ever quarterly earnings announcement.
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Executive Summary
- Foreign investors net sold approximately 72.6 trillion won of Samsung Electronics stock in the process of conducting large-scale selling in the KOSPI market in the first half of 2026, rebalancing their portfolios.
- On July 2, the KOSPI index plunged, dragging down Samsung Electronics' share price. However, on July 3, an influx of bargain hunters pushed the stock up 8.22% to close at 309,500 won, successfully rebounding.
- In its preliminary Q2 earnings release scheduled for July 7, Samsung Electronics is expected to post historic performance, with revenue of approximately 172 trillion won and operating profit of about 85 trillion won.
- Whether the 10 to 20 trillion won special performance bonus provision for the Device Solutions (DS) division, which oversees the semiconductor business, is reflected will be the key variable determining the final Q2 operating profit.
Market Overview
Due to the mechanical rebalancing by foreign investors, Samsung Electronics' foreign ownership rate fell to as low as 47.43% in late June, marking its lowest level in approximately 13 years.
Although net selling by foreigners continued into early July, analysts view this as passive fund flows aimed at adjusting South Korea's weight in global indexes and taking profits, rather than deteriorating corporate fundamentals.
As of July 4, 2026, the KOSPI index stands at 8088.34, and the USD/KRW exchange rate remains at a high level of 1530.00 won.
Currently, the KOSPI Fear & Greed Index points to 21.2, representing an "Extreme Fear" stage, indicating heavily weighed investor sentiment as the corporate earnings inflection point nears.
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Financial Analysis
According to financial information provider FnGuide and the financial investment industry, Samsung Electronics' Q2 consolidated earnings consensus is estimated at 172.1108 trillion won in revenue and 85.1193 trillion won in operating profit.
This represents an explosive growth rate, with revenue surging about 130% and operating profit soaring about 1,720% compared to the same period last year.
The semiconductor (DS) sector, the driver behind this massive earnings turnaround, is being propelled by rising memory prices driven by global big tech companies expanding their AI data center investments.
During Q2, the average selling price (ASP) of legacy DRAM jumped about 40–50% quarter-on-quarter, while NAND flash prices surged about 60–70%, strengthening the seller-dominant market.
| Item (Q2 2026) | Market Consensus (Average Estimate) | YoY Growth Rate | Key Characteristics & Variables |
|---|---|---|---|
| **Revenue** | Approx. 172.1108T KRW | +130.8% | Increased AI memory demand and favorable foreign exchange rates |
| **Operating Profit** | Approx. 85.1193T KRW | +1720.3% | Subject to DS division special bonus provision write-offs |
| **DRAM ASP Increase** | +40% ~ +50% QoQ | - | Price surge due to worsening legacy memory supply shortages |
| **NAND ASP Increase** | +60% ~ +70% QoQ | - | Continued strong sales of enterprise SSDs and high-capacity products |
Valuation
As of the close on July 3, 2026, Samsung Electronics' stock price was 309,500 won, with some brokerages proposing target prices up to the 580,000–590,000 won range.
Despite the current high stock price level, the acceleration of DRAM demand centered on AI servers is estimated to bring the company's projected Return on Equity (ROE) for the full year of 2026 to around 49%.
As the upward price cycle lengthens, Samsung Electronics' projected Book Value per Share (BPS) for 2026 is tracking at around 103,000 won, indicating solid fundamentals.
Depending on the speed of securing leadership in High Bandwidth Memory (HBM4) and next-generation product lineups, a conditional multiple re-rating of its future value remains possible.
Analyst & Institutional Perspectives
Many stock market experts assess that the large-scale foreign net selling in the first half of the year was closer to profit-taking and portfolio diversification rather than an exit from the Korean market.
With passive trading driven by weight adjustments from global asset managers entering its final stages, the dominant view is that supply-demand pressure will gradually ease in the second half of the year.
Major institutions predict that the preliminary earnings announcement on July 7 will be a critical watershed, determining the future flow and supply-demand direction of the semiconductor sector.
Additionally, long-term growth strategies, such as the planned 60 trillion won investment in robot and physical AI clusters in the Yeongnam region (including Gumi and Busan), are recognized as positive momentum.
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Risk Factors
The largest variable is whether the special performance bonus provision (estimated at 10 to 20 trillion won) is recognized as a one-off expense, which presents a risk that Q2 operating profit could slightly miss market expectations.
Rising manufacturing costs due to surging memory prices could translate into cost burdens for the set divisions (smartphones and home appliances), potentially slowing down the profitability of the Mobile eXperience (MX) division.
Concerns over the US Federal Reserve keeping interest rates higher for longer, coupled with the USD/KRW exchange rate maintaining high volatility at the 1530.00 won level, could trigger foreign exchange loss concerns among foreign investors.
Doubts about the long-term sustainability of global AI infrastructure investment demand and the possibility of a macroeconomic slowdown are also macro factors dampening investor sentiment.
Investment Outlook
In the short term, it is advisable to closely monitor the level of detail regarding cost reflections in the Q2 preliminary earnings on July 7 and the subsequent reaction of global passive funds.
A scenario is being discussed in which the temporary supply-demand distortion caused by index rebalancing will gradually ease as improvements in fundamentals, such as achieving historic earnings, are re-confirmed.
Securing a supply advantage in next-generation HBM4 and winning additional orders from global big tech clients in the foundry division hold the key to the long-term direction of the stock price.
Frequently Asked Questions (FAQ)
Q1. What is the real reason why Samsung Electronics' foreign ownership rate recently fell to its lowest level in 13 years?
A1. Rather than a decline in corporate competitiveness, the primary factors are large-scale profit-taking by foreigners following the stock price surge in the first half of the year and mechanical passive selling to adjust weights in global asset allocation indexes (such as MSCI).
Q2. How will the special performance bonus provision affect the Q2 operating profit forecast?
A2. A provision of approximately 10 to 20 trillion won for the semiconductor division's special performance bonus is scheduled to be reflected in Q2 earnings. Excluding this one-off expense, normalized operating profit is analyzed to show a solid trend exceeding 100 trillion won.
Q3. What was the direct background behind the 8.22% surge in the stock price on July 3?
A3. The influx of bargain hunters following the previous day's sharp drop, the announcement of a 60 trillion won physical AI and robot cluster investment plan in the Yeongnam region, and discussions of foundry cooperation with global big tech companies acted positively.
Q4. Is the exchange rate in the 1530 won range positive or negative for foreign supply and demand?
A4. A weak won works favorably for export performance in terms of foreign exchange gains, but from the perspective of foreign investors, it poses a risk of foreign exchange losses, creating a double-edged sword that can trigger mechanical selling.
Q5. What is the key driver for improving Samsung Electronics' supply-demand balance in the second half of the year?
A5. Key factors include the reduction of further selling pressure after the completion of global index rebalancing, performance metrics following the full-scale supply of High Bandwidth Memory (HBM4), and the stabilization of the USD/KRW exchange rate.