Samsung Electronics to reveal Q2 earnings next week as markets enter results season

South Korea's stock market enters the second-quarter earnings season next week. With semiconductor shares rattled this week by concerns over a slowdown in AI investment tied to Meta, market attention is now turning to corporate scorecards, beginning with Samsung Electronics.

The Kospi closed Thursday up 440.25 points, or 5.76 percent, at 8,088.34, according to Korea Exchange. The index briefly turned negative during the session but recovered the 8,000-point mark, buoyed by institutional net purchases exceeding 4 trillion won ($2.57 billion). For the week running June 29 through July 3, the Kospi fell 3.84 percent while the Kosdaq gained 2.00 percent.

Markets were unsettled this week by concerns that Meta's reported consideration of a cloud computing venture — one that would leverage idle computing capacity at its AI data centers — signals a slowdown in AI capital expenditure. The Philadelphia Semiconductor Index tumbled on the news, dragging South Korean chip heavyweights Samsung Electronics and SK hynix sharply lower.

Analysts interpreted the selloff as short-term noise rather than a structural shift in the AI investment cycle. "Meta's move into cloud services is a strategy to maximize utilization of AI infrastructure it has already built, not a sign of declining demand for AI computing," said Na Jeong-hwan, a researcher at NH Investment & Securities. "Noise around memory chips is expected to ease as the earnings season allows the market to reconfirm fundamentals."

Lee Jae-won, a researcher at Yuanta Securities Korea, echoed that view. "This correction has more the character of a valuation adjustment driven by noise than any actual damage to fundamentals," he said. "There are still no signals to support a deterioration in the memory chip environment — such as hyperscaler capex cuts or a reduction in long-term HBM supply contracts."

NH Investment & Securities set its projected Kospi trading band for next week at 7,200 to 9,000 points. Upward revisions to second-quarter earnings forecasts were cited as a potential upside driver, while concerns over slowing AI investment and uncertainty surrounding the US Federal Reserve's monetary policy were flagged as downside risks.

The first major focus next week will be Samsung Electronics' preliminary second-quarter earnings, due Monday, July 7. The results are seen as the first key test of whether recent concerns about the memory chip market have been overblown. Kyobo Securities forecast Samsung Electronics will post record quarterly earnings, with sales of 176.2 trillion won and operating profit of 80.3 trillion won, driven by rising memory chip prices and a weaker won.

Overseas, a series of US economic and monetary policy events are also on the calendar. NH Investment & Securities highlighted the June ISM services index, due Sunday, July 6; the Federal Open Market Committee minutes, set for release Wednesday, July 9; and a speech the same day by New York Federal Reserve President John Williams. "In the FOMC minutes, what matters is the reasoning of members who argued for at least one rate hike this year, and how Middle East war risks are being factored into monetary policy," said Jeong Yeo-gyeong, a researcher at NH Investment & Securities. "Williams' speech should also be watched for any divergence in rate views within the Fed."

Daishin Securities noted that the recent correction has pushed the Kospi's 12-month forward price-to-earnings ratio into the six-times range — falling below seven times for the first time since the global financial crisis and entering undervalued territory. Sector leaders including semiconductors, automobiles, secondary batteries, shipbuilding, defense and machinery have also moved into undervalued zones relative to their earnings per share on both a weekly and monthly basis.

"If second-quarter earnings come in better than expected, a strong rebound is possible," said Lee Gyeong-min, a researcher at Daishin Securities. "Even if results are somewhat disappointing, as long as they do not constitute a shock, a turnaround remains achievable as uncertainty clears and the case for undervalued stocks is reassessed."