SAMSUNG SHARES FALL DESPITE PROFIT SURGE AS CHIP STOCKS DECLINE

Semiconductor stocks declined on Tuesday following Samsung Electronics' earnings announcement, with the South Korean company's shares dropping 8% despite quarterly profit exceeding that of Nvidia and Apple. Samsung reported that it expects operating profit to increase by $1,800%. The broader semiconductor sector fell in sympathy, with the iShares Semiconductor ETF declining approximately 5%. Intel and Applied Materials each fell about 8%, whilst Lam Research dropped 7% and Advanced Micro Devices fell approximately 5%.

The decline reflects investor expectations in the artificial intelligence sector that have outpaced company results. Wall Street analysts have previously witnessed similar post-earnings declines for Nvidia and cybersecurity firms including CrowdStrike and Palo Alto Networks, despite those companies beating their targets. Memory chip stocks have experienced significant gains this year, driven by a supply shortage and strong artificial intelligence demand that has enabled companies to increase prices. South Korea's Kospi index fell roughly 5%, whilst SK Hynix, scheduled to list on the Nasdaq on Friday, dropped approximately 7%. U.S. memory manufacturers Sandisk and Micron Technology fell about 8% and 5% respectively.

SK Hynix plans to raise $28 billion through its forthcoming listing, representing the second-largest initial public offering following SpaceX. Analysts have suggested that Tuesday's selloff may reflect investor recalibration following the memory sector's substantial performance gains earlier in the year, or repositioning ahead of SK Hynix's listing this week.