Samsung Shares Hit Three-Year High As AI Wave Turbocharges Profits


Samsung shares hit a three-year excessive on Friday after the South Korean tech large forecast a 15-fold improve in its second quarter working revenue from the identical time final yr, as the worldwide synthetic intelligence increase buoys demand for superior laptop chips.

Key Information

Shares of Samsung Electronics in Seoul, the flagship entity of the South Korean Samsung Group conglomerate, climbed 3% on Friday, reaching 87,100 Korean gained per share (round $63) at market shut.

It marks the best peak for Samsung Electronics shares since early January 2021 and comes after the corporate issued revenue steerage for the second quarter of this yr.

Samsung mentioned it expects to make round 10.4 trillion Korean gained in revenue for the second quarter of 2024, or round $7.5 billion.

The determine, up from 670 billion gained (round $500 million) a yr earlier, smashed analysts’ expectations and marked a 15-fold improve from a yr in the past, in addition to comfortably beating first quarter income of 6.61 trillion gained ($4.8 billion).

Samsung mentioned it anticipated to rake in 60 trillion gained ($43.5 billion) in gross sales income throughout the second quarter of this yr, a leap of almost 1 / 4 from the identical time final yr.

What To Watch For

Samsung has not launched a lot info on its anticipated second quarter takings however the spectacular forecasts are more than likely all the way down to sturdy efficiency in its semiconductor unit. Samsung is likely one of the world’s largest laptop chip producers and booming demand for synthetic intelligence has despatched costs for chips skyrocketing, notably high-end chips that can be utilized to energy AI merchandise and knowledge facilities. Samsung itself has attributed its anticipated development this yr to broader AI optimism, and particularly curiosity in generative synthetic intelligence, or the form of AI powering instruments like ChatGPT, Gemini, Claude and Copilot. As properly as serving to Samsung get well from a troublesome COVID-19 pandemic droop, the AI increase has propelled different chip and AI firms to stratospheric heights. Notable amongst these is U.S. chipmaker Nvidia, which has quickly grown from a comparatively area of interest maker of {hardware} primarily utilized by players to one of many world’s most precious firms with a market capitalization of greater than $3 trillion. Nvidia was briefly the world’s most precious public firm by market capitalization, although it’s now the third most precious behind Microsoft and Apple.

What To Watch For

Samsung is because of launch a extra detailed earnings report for its second quarter on the finish of July.

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