Samsung Electronics loses 25% in two weeks, whipsawing Kospi like a crypto coin

A 25% drop in just two weeks — this is not the story of a speculative theme stock or a cryptocurrency. It is the price trajectory of Samsung Electronics, South Korea's most valuable company with a market cap of 2,000 trillion won ($1,290 billion).

Over roughly the past month since June, Samsung Electronics shares swung more than 7% on eight separate trading days, including three sessions where the move exceeded 10%. Samsung Electronics — including its preferred shares — accounts for about 30% of total Kospi market capitalization, and its turbulence has sent the broader index on a roller-coaster ride.

According to Korea Exchange, after tumbling 9.06% on Wednesday, Samsung Electronics rebounded 8.22% on Thursday to close the week at 309,500 won per share.

Over the past month, the stock has shown extreme volatility. The gap between its intraday high of 374,500 won recorded on June 19 and its low of 281,500 won on Wednesday reached 25%.

The stock has been particularly sensitive to external shocks. On June 23, concerns over US interest rate hikes combined with profit-taking in semiconductor shares prompted heavy selling by foreign and institutional investors, sending the stock down 12.31% — its steepest single-day decline since 2008.

The very next day, however, US memory chip maker Micron Technology reported earnings that beat market expectations, confirming robust demand for AI memory chips, and Samsung shares surged 9.84%.

On Wednesday, news that Meta — the parent company of Facebook and Instagram — was moving into the AI cloud infrastructure business sent Samsung shares tumbling 9.06%.

Meta is reportedly preparing a cloud service called Meta Compute, under which it would sell spare computing capacity from its own data centers to outside customers.

Having poured massive investment into expanding AI data centers, Meta now appears set to flip to the supply side, reselling excess capacity from those same facilities. The move stoked market concerns about whether a semiconductor supply shortage would materialize as expected.

Yet the sell-off reversed the following day, Thursday, with shares climbing 8.22%. Analysts attributed the rebound to bargain hunters who saw the drop as a buying opportunity, along with growing anticipation ahead of Samsung Electronics' second-quarter earnings release.

SK hynix, the second-largest chipmaker by market cap, followed a similar pattern. Its shares swung more than 7% on nine trading days over the past month. On Wednesday alone, the stock plunged 14.57%, only to surge 10.88% the very next day.

The concern is that the two stocks together account for 55.99% of the Kospi — based on Thursday's closing prices — amplifying volatility across the entire index.

When the two semiconductor stocks were roiled by the Meta news on Wednesday, the Kospi fell 7.89% in a single session — a stark contrast to the resilience shown by Japan's market.

On the same day, Japan's leading semiconductor names Kioxia Holdings and Tokyo Electron fell 13.47% and 7.44%, respectively, yet the Nikkei 225 declined only 2.47%.

Still, analysts say both Samsung Electronics and SK hynix retain significant upside. They point to memory chip supply that continues to lag demand, and to solid earnings outlooks for both companies.

The market consensus projects Samsung Electronics' second-quarter sales at 173 trillion won and operating profit at 85 trillion won. SK hynix is expected to post record second-quarter results as well, with sales of 83 trillion won and operating profit of 64 trillion won.

"The volatility we are seeing in semiconductor stocks lately is less a new negative catalyst and more a process in which conflicting interpretations of the same developments are unsettling investor sentiment," said Jo A-in, an analyst at Samsung Securities. "In the past, leading stocks have often sustained their earnings-driven upward trends even while going through repeated corrections of 10 to 20 percent."