Both stocks briefly break key price floors during trading; leveraged ETFs drop more than 20%; analysts still see strong earnings ahead, raise Samsung target to 530,000 won
Samsung Electronics and SK Hynix each tumbled more than 10% at the open Monday, as a selloff in US semiconductor stocks swept through the domestic market.
The shock hit leveraged exchange-traded funds hardest. Single-stock leveraged ETFs tied to both companies — which had attracted heavy retail investment — collapsed at the open, posting losses of around 20%.
Securities analysts say a near-term correction in semiconductor stocks is unavoidable, but they remain upbeat on the long-term earnings outlook. NH Investment raised its target price for Samsung Electronics to 530,000 won (about $343), reflecting a broadly positive view on the sector.
According to Korea Exchange data, Samsung Electronics opened at 293,000 won Monday, down 10.94% from its previous closing price of 329,000 won. SK Hynix opened at 1,856,000 won, falling 10.34% from its prior close of 2,070,000 won.
The selloff followed a sharp drop in US technology stocks on Friday local time, when the Nasdaq fell 4.2% and the Philadelphia Semiconductor Index tumbled 10.3%. Broadcom's earnings and AI chip outlook disappointed the market, dragging Nvidia, Micron and AMD lower alongside other AI semiconductor names. Strong US jobs data added to interest rate concerns, amplifying profit-taking pressure across richly valued technology stocks.
The plunge marks the first sharp reversal after a three-month AI semiconductor rally. From their recent intraday highs, Samsung Electronics was down 18.72% from its June 2 peak of 360,500 won, while SK Hynix had fallen 21.46% from its June 1 high of 2,363,000 won.
Leveraged ETFs absorbed an even larger blow. Five ETFs tracking twice the daily return of Samsung Electronics shares fell as much as 22% at the open, while two futures-based leveraged ETFs tracking Samsung dropped as much as 24%. A leveraged ETF tied to SK Hynix also fell around 20% in early trading.
Viewed over a three-month horizon, however, cumulative gains remain substantial. Compared with early March, Samsung Electronics was still up 50.18% and SK Hynix up 97.66% at Monday's open. Analysts say the day's drop is hard to attribute solely to a deterioration in memory chip fundamentals, describing it instead as a price shock driven by the US-led semiconductor correction, the burden of a rapid short-term run-up, and concentrated profit-taking.
Even as share prices fell, NH Investment raised its target price for Samsung Electronics to 530,000 won from 490,000 won. The brokerage said Computex 2026 confirmed that the AI investment cycle is broadening beyond graphics processing units to central processing units and memory chips.
NH Investment analyst Ryu Young-ho said the spread of agentic AI — which handles real-world tasks autonomously — will drive growing demand for inference computing, increasing the amount of DRAM required per server.
With DRAM and NAND prices continuing to rise, NH Investment projected Samsung Electronics' second-quarter sales at 168.2 trillion won and operating profit at 84.6 trillion won.
kacew@heraldcorp.com
