Foreign Investors Sell 7 Trillion Won Worth of Samsung Electronics and SK Hynix Shares; Fact-Check on AI Memory Earnings
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While foreign investors’ net selling of around 7 trillion won cannot be viewed solely as a negative factor, it is also not a signal that unconditionally justifies buying by retail investors. We will outline investment criteria by distinguishing between the official earnings reports of Samsung Electronics and SK Hynix, memory prices, demand for AI infrastructure, and cyclical risks.

- On May 7, 2026, foreign investors recorded net sales of around 7 trillion won on the KOSPI, but the index closed higher thanks to buying by retail and institutional investors.
- Following an operating profit of 57.23 trillion won in the first quarter of 2026, Samsung Electronics has provided guidance of approximately 89.4 trillion won in operating profit for the second quarter.
- SK Hynix's official operating profit margin for the first quarter of 2026 was 72%, which is an exceptionally high level of profitability by manufacturing industry standards.
- The forecast of annual operating profit in the 300 trillion won range should be distinguished as estimates by securities firms and consensus projections, rather than official figures.
- The semiconductor cycle may not have disappeared but could have actually lengthened and strengthened due to demand for AI servers and HBM, with a slowdown in price growth being the key risk.

Based on publicly available data as of July 9, 2026, this article examines and verifies the arguments regarding Samsung Electronics and SK Hynix—specifically, claims of market overheating, undervaluation, and an AI memory supercycle—separately. The conclusion is not straightforward. While large-scale net selling by foreign investors is a clear warning sign, the official earnings reports and memory price trends of both companies simultaneously indicate profit leverage that is far stronger than in past semiconductor cycles.
However, conclusions such as “sell immediately” or “buy unconditionally” are not appropriate for a data-driven analysis. Investment decisions must take into account official earnings, consensus estimates, memory prices, the sustainability of clients’ AI investments, the pace of supply growth, and valuation.
Key Conclusions

Foreign investors’ net selling of approximately 7 trillion won worth of KOSPI stocks is more likely to be interpreted as profit-taking and portfolio rebalancing focused on large-cap semiconductor stocks—which had surged sharply at the time—rather than a general withdrawal from the Korean stock market.
Samsung Electronics has provided guidance for Q2 operating profit of approximately 89.4 trillion won, following Q1 2026 operating profit of 57.23 trillion won. Even a simple sum of the first half figures alone amounts to approximately 146.6 trillion won.
SK Hynix reported first-quarter 2026 revenue of 52.5763 trillion won, operating profit of 37.6103 trillion won, and an operating profit margin of 72%. While this level of profitability is rare in the manufacturing sector, figures around 75% still require a distinction between official confirmed figures and estimates.
Demand for AI servers, HBM, server DRAM, and eSSDs is driving memory prices sharply higher. However, if the rate of price increases slows or supply expansion outpaces demand, stock prices could correct before earnings results are released.
The key to deciding whether to sell or hold is not so much “whether the stock price has risen significantly,” but rather “whether the pace of upward revisions to earnings forecasts is being maintained” and “whether visibility on memory prices and orders is deteriorating.”

Claims in the Original Text and Verifiable Data

Issue
Verifiable Facts
Interpretation

Foreign investors’ sales in the 7 trillion won range
As of the May 7, 2026, report, foreign investors were net sellers of approximately 7.15 trillion to 7.17 trillion won on the KOSPI, while retail investors were net buyers of approximately 5.99 trillion won. The KOSPI closed at 7,490.05, up 1.43%.
Large-scale selling does not always lead to a sharp drop in the index. At that time, buying by retail and institutional investors, along with expectations for semiconductor earnings, absorbed the selling pressure.

Stocks Targeted by Selling
Foreign investors’ net sales of Samsung Electronics and SK Hynix totaled approximately 5.27 trillion won, accounting for about 74% of the total foreign net sales on the KOSPI.
This can be viewed as a reduction in exposure to the stocks that had led the recent rally, rather than a general flight from the Korean market.

Samsung Electronics: “Annual Operating Profit in the 300 Trillion Won Range”
This is not an officially confirmed figure. However, based solely on the first-quarter 2026 operating profit of 57.23 trillion won and the second-quarter guidance of 89.4 trillion won, the first half of the year would total approximately 146.6 trillion won.
The forecast of annual operating profit in the 300 trillion won range falls within the realm of estimates by some securities firms and the consensus. A distinction must be made between guidance and forecasts.

SK Hynix: “Operating Profit Margin of 75%”
The operating profit margin for the most recent officially confirmed quarter—Q1 2026—was 72%.
A forecast in the mid-70% range is possible, but it remains an estimate until official earnings are announced.

Soaring Memory Prices
TrendForce forecasts that in Q2 2026, contract prices for standard DRAM will rise by 58–63%, and NAND flash prices will rise by 70–75%. For the third quarter, it forecast a slowdown in the rate of increase, with DRAM prices rising 13–18% and NAND prices 10–15%.
While prices will continue to rise, stock prices become more sensitive when the rate of increase slows.

The 40-Month Semiconductor Cycle
While investment in AI infrastructure may extend the cycle, it is difficult to conclude that the supply and price cycle of the memory industry itself has disappeared.
It is more accurate to say that “the demand base and duration of the cycle have changed” rather than “the cycle has been broken.”

Why Did Retail Investors Snap Up Foreign Selling?
Attributing all retail buying solely to FOMO (fear of missing out) may underestimate the phenomenon. Three factors converged behind retail investors’ purchases of major semiconductor stocks at the time.
First, earnings forecasts were sharply revised upward. Samsung Electronics’ guidance for the second quarter of 2026 significantly exceeds its full-year 2025 operating profit of 43.6 trillion won—by more than a full year’s worth in just one quarter. SK Hynix also posted an operating profit of 37.6 trillion won in the first quarter of 2026—equivalent to about 80% of its full-year 2025 operating profit of 47.2 trillion won—in a single quarter.
Second, foreign selling does not necessarily indicate a deterioration in fundamentals. Such selling may be a mix of portfolio rebalancing to reduce exposure to surging blue-chip stocks, short-term profit-taking, and sales for currency exchange rate and risk management purposes.
Third, Korean retail investors can intuitively grasp the profit sensitivity of Samsung Electronics and SK Hynix. This is because the business structure is such that when semiconductor prices rise, not only revenue but also profit margins increase. However, if this intuition becomes excessive, it can lead to chase buying that ignores price and risk.
The Structure of the AI Memory Boom
What Is HBM?
HBM stands for High Bandwidth Memory. It is a type of high-bandwidth memory created by vertically stacking multiple DRAM chips to enable AI accelerators and GPUs to rapidly exchange large volumes of data. Since memory bandwidth and power efficiency—not just computational performance—become bottlenecks in the training and inference of large-scale AI models, the strategic value of HBM has increased.
Why Have DRAM and NAND Prices Risen as Well?
HBM production requires significant amounts of high-end DRAM wafers, packaging, and testing resources. When memory manufacturers prioritize production capacity for HBM and server-grade products, the supply of standard DRAM decreases. At the same time, AI servers require a large number of high-performance SSDs to store model parameters, vector databases, logs, caches, and checkpoints. This creates a ripple effect where HBM demand drives up prices for server DRAM, eSSDs, and even NAND.
Why Operating Profit Margins Are Abnormally High
The memory semiconductor industry is characterized by a high proportion of fixed costs. Since factory and equipment costs have already been incurred, when selling prices rise, a significant portion of the additional revenue flows directly into operating profit. During periods of supply shortages, customers prioritize securing volume over price, leading to simultaneous improvements in both product mix and pricing. This is the key factor behind exceptional figures such as SK Hynix’s 72% operating profit margin in the first quarter of 2026.
The Difference Between Samsung Electronics and SK Hynix

Category
Samsung Electronics
SK Hynix

Business Structure
Diversified structure including memory, System LSI, foundry, smartphones, displays, and home appliances
Pure-play semiconductor business focused on memory, with high sensitivity

Latest Confirmed Major Financial Results
Guidance for Q2 2026: Revenue of approximately 171 trillion won, operating profit of approximately 89.4 trillion won
Q1 2026 revenue of 52.5763 trillion won, operating profit of 37.6103 trillion won

Strengths
Simultaneously benefits from a recovery in the memory market and options in the foundry and finished product businesses
Booming demand for HBM, server DRAM, and eSSDs directly drives profits

Key Risks
Cost pressures in the set business; fluctuations in foundry yield and order intake; sustainability of HBM competitiveness
High profit sensitivity to falling memory prices; high concentration of customers and products

Key Metrics for Investors
DS division profit margin, HBM shipments and customer certifications, improvement in foundry profitability
HBM volume and prices, server DRAM prices, eSSD profitability, pace of capital expenditures

Why You Shouldn’t Blindly Believe That “A P/E Ratio of 5–6 Is Cheap”
Semiconductor stocks have traditionally tended to have lower P/E ratios as earnings approach their peak. While a low P/E ratio may appear attractive when earnings grow significantly and earnings per share (EPS) surge, this is because the market is already pricing in the next downturn cycle to justify the low valuation.
Therefore, a low P/E ratio does not always indicate undervaluation. The key questions are as follows:

Are earnings forecasts for the next 4–8 quarters continuing to be revised upward?
Will the long-term contract prices for HBM and server DRAM hold steady?
Are customers’ AI infrastructure investment plans holding steady?
Is there a possibility that new capital expenditures could create an oversupply in 2027–2028?
Has the stock price risen too far ahead of the earnings growth rate?

The P/E ratio is merely a starting point. In the memory industry, the direction and pace of earnings growth are often more important than the absolute size of profits.
Signals to Consider Selling or Reducing Exposure
This list is not investment advice but a checklist for assessing risk.

The growth rate of DRAM and NAND contract prices slows, and securities firms stop raising their earnings estimates.
HBM supply contract terms shorten, or pressure to renegotiate prices increases.
AI capital expenditure guidance from NVIDIA, cloud service providers, and Big Tech companies is revised downward.
Customer inventory days increase, and orders shift from a “stockpiling” mode to a “de-stocking” mode.
Capital expenditures by major companies such as Samsung Electronics, SK Hynix, and Micron surge simultaneously, raising concerns about a supply glut in 2027–2028.
Stock prices have surged sharply in the short term, but earnings estimates have not kept pace, making both forward P/E and P/B ratios a cause for concern.
Variables affecting South Korean semiconductor production costs—such as a strong won, export restrictions, geopolitical risks, and electricity, water, and labor costs—are deteriorating.

Signals That Could Justify Holding or Increased Interest
Conversely, if the following signals continue to emerge, it would be difficult to conclude that fundamentals have been compromised, even if a short-term correction occurs.

Quarterly earnings consistently exceed consensus estimates.
Rising memory prices spread beyond HBM to server DRAM, LPDDR, and eSSD.
Long-term supply contracts with major customers, advance payments, and take-or-pay agreements increase.
Even as capital expenditures rise, the actual start of operations is delayed, prolonging the supply shortage.
Shareholder returns, dividends, and share buyback policies link the surge in profits to shareholder value.
Orders from major customers for Samsung Electronics’ foundry business are confirmed not just by media reports but through official contracts and revenue.

Points to Consider When Expanding Your Focus to Foundries and Equipment Stocks
Bottlenecks in TSMC’s advanced processes and packaging could present opportunities for Samsung Electronics’ foundry business and domestic semiconductor equipment, materials, and component companies. However, the mere fact that “TSMC is busy” does not mean that all domestic foundry-related stocks will benefit.
Equipment and materials stocks are more volatile than large-cap stocks. The following points should be verified.

Checkpoint
Why It’s Important

Actual Revenue Exposure
Verify whether increased investment by Samsung Electronics and SK Hynix translates into revenue for the company in question.

Process Stage
The closer a company is to bottleneck areas—such as HBM, advanced packaging, EUV, inspection and metrology, and eSSD—the greater its potential to benefit.

Order Backlog
This indicates whether there are actual orders, rather than just a market trend.

Operating Profit Margin
Even if revenue increases, profits can be diluted if costs—such as production costs, labor costs, and component procurement costs—rise.

Customer Concentration
If a single customer’s investment schedule is delayed, earnings volatility increases.

Valuation
These stocks may rise faster than blue-chip stocks, but they can fall even more sharply if expectations are dashed.

Key Distinctions to Make When Interpreting Data
Official Earnings, Guidance, and Consensus Are Different
Official earnings are past figures announced by the company. Guidance is a preliminary forecast provided by the company. Consensus is the average or range of forecasts from securities firms. The statement, “Samsung Electronics may generate operating profit in the 300 trillion won range this year,” is a forecast, not an officially confirmed result.
Operating Profit and Net Income Are Different
Operating profit is the profit generated from core business operations. Net income is the final profit after accounting for financial gains and losses, taxes, equity method adjustments, and one-time gains and losses. When comparing global companies, mixing operating profit and net income in your analysis can distort the conclusions.
Quarterly and Annual Earnings Should Not Be Directly Compared
The fact that Samsung Electronics’ operating profit guidance for the second quarter of 2026 exceeds its full-year operating profit for 2025 is a strong signal that its earnings resilience has surged. However, it is risky to simply multiply a single quarter’s figure by four to determine annual earnings. Memory prices, shipment volumes, exchange rates, bonuses, depreciation, and inventory valuations fluctuate from quarter to quarter.
Overall Assessment
The 2026 AI memory boom for Samsung Electronics and SK Hynix is not merely a passing trend; it is already reflected in their official earnings. The fact that retail investors absorbed the selling pressure despite foreign investors’ net sales of around 7 trillion won cannot be explained solely by unconditional frenzy. There are clear grounds for this: accelerating earnings growth, memory supply shortages, and an improved product mix centered on HBM.
However, it is precisely because of these strong numbers that we must remain even more level-headed. The most dangerous moment in the memory industry may not be when earnings are poor, but when earnings are so strong that everyone begins to believe, “This time is different.” While this cycle may be longer and stronger than in the past, the laws of supply and demand have not disappeared.
Therefore, investors must abandon simplistic frameworks such as “It’s over because foreign investors sold” or “It’s definitely cheap because the P/E ratio is low.” The key is to track the upcoming quarterly earnings reports, memory price growth rates, visibility into HBM contracts, the sustainability of Big Tech’s AI investments, and the pace of supply growth in 2027–2028 all at the same time.

FAQ
Q. Is it always bad news when foreign investors sell more than 7 trillion won worth of stocks?
A. It isn't necessarily bad news. While foreign selling may reflect a deterioration in the economy or corporate earnings, it could also be profit-taking on sharply rising blue-chip stocks or portfolio rebalancing. At the time, buying by retail and institutional investors, along with expectations for strong semiconductor earnings, absorbed the selling pressure.
Q. Are all purchases by individual investors driven by FOMO?
A. No. While some of this may be a mix of chase buying and FOMO, the sharp upward revisions to the earnings forecasts for Samsung Electronics and SK Hynix are also a key factor driving retail buying. However, buying without regard for price—even when fundamentals are strong—poses a separate risk.
Q. Is the forecast that Samsung Electronics will post operating profits in the 300 trillion won range in 2026 a confirmed fact?
A. This is not a confirmed fact. The company has officially announced only its past earnings and quarterly guidance; the forecast of around 300 trillion won for the year falls within the realm of securities firms’ estimates or market consensus. Investors should distinguish between official earnings, company guidance, and market forecasts.
Q. Is SK Hynix's operating profit margin of 75% an official figure?
A. The officially confirmed operating profit margin for the first quarter of 2026 is 72%. Figures around 75% may represent forecasts or estimates for subsequent quarters, so they should not be treated as definitive figures until the actual quarterly results are announced.
Q. Does a P/E ratio of 5 to 6 necessarily mean a stock is undervalued?
A. That is not necessarily the case. Memory semiconductors often appear to have low P/E ratios when their earnings are at their peak. To determine whether a low P/E ratio indicates that the stock is undervalued, one must consider the earnings outlook for the next quarter, price growth rates, increases in supply, and the sustainability of customer investment.
Q. Has the 40-month semiconductor cycle been broken?
A. It is difficult to conclude that the cycle has ended. While demand for AI servers and HBM could make the cycle longer and stronger, the risks of supply expansion and price declines in the memory industry still exist.
Q. Why is demand for HBM driving up the prices of standard DRAM and NAND as well?
A. When HBM production absorbs high-end DRAM production capacity, the supply of standard DRAM decreases. Since AI servers also require high-capacity storage devices, demand for eSSDs and NAND flash memory increases as well. When supply is tight, this chain reaction leads to price increases.
Q. Do stocks related to Samsung Electronics' foundry business also benefit in the same way?
A. This does not mean they will automatically benefit. While the TSMC bottleneck could present an opportunity for Samsung Electronics’ foundry business, it is necessary to separately assess the actual order intake, process exposure, customer concentration, profitability, and valuation of the relevant companies.
Q. What is the most important indicator when deciding when to sell?
A. The key factors are the rate of increase in memory contract prices, visibility into HBM orders, whether earnings estimates will be raised, Big Tech’s AI investment plans, and the pace of supply expansion. What matters more than the stock price itself is whether the momentum of earnings growth is slowing.
Q. Is this post a buy or sell recommendation?
A. No. This article is an informational piece that verifies claims regarding supply, demand, and performance based on publicly available data. Actual investment decisions should be made after considering an individual’s investment horizon, risk tolerance, portfolio allocation, taxes, and transaction costs.

Sources
- Samsung Electronics Announces Earnings Guidance for the Second Quarter of 2026: https://news.samsungsemiconductor.com/global/samsung-electronics-announces-earnings-guidance-for-second-quarter-2026/
- Samsung Electronics Announces First-Quarter 2026 Results: https://news.samsungsemiconductor.com/global/samsung-electronics-announces-first-quarter-2026-results/
- Samsung Electronics Announces Fourth-Quarter and Fiscal Year 2025 Results: https://news.samsung.com/global/samsung-electronics-announces-fourth-quarter-and-fy-2025-results
- SK Hynix Announces First-Quarter 2026 Financial Results: https://news.skhynix.co.kr/q1-2026-business-results/
- SK hynix Reports Record Annual Financial Results for 2025: https://news.skhynix.com/sk-hynix-announces-fy25-financial-results/
- Foreign Investors Sell 5 Trillion Won Worth of Samsung and SK Hynix Shares… Yet the KOSPI Hits a Record High: https://marketin.edaily.co.kr/News/ReadE?newsId=07084806645446624
- Foreign Investors Sold 7 Trillion Today Alone... Here Are the Four Stocks They Dumped in a Frenzy: https://www.mt.co.kr/stock/2026/05/07/2026050716332265134
- TrendForce Says AI Server Demand Will Drive Memory Contract Price Increases in 2Q26: https://www.trendforce.com/presscenter/news/20260331-12995.html
- TrendForce Says AI Server Demand Will Continue to Support Memory Prices in 3Q26: https://www.trendforce.com/presscenter/news/20260703-13134.html
- TSMC is working hard to meet chip demand and would like to raise prices: https://www.reuters.com/world/china/tsmc-boss-upbeat-outlook-ai-boom-shows-no-sign-easing-2026-06-04/
- Samsung Reports a 19-Fold Increase in Profit, but Shares Plunge Amid Fears the AI Boom May Stall: https://www.reuters.com/world/asia-pacific/samsung-estimates-19-fold-rise-q2-operating-profit-beating-expectations-2026-07-06/

Images
- Semiconductor chip, wafer and data centers with falling red and rising teal arrows: https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3OCwicHVyIjoiYmxvYl9pZCJ9fQ==--f66b8e54961cb06037ed21f880746e7f60442bc9/ai-e1f97137.webp
- Stacked AI memory chips linked to a factory, servers, chart, warning sign, and magnified documents: https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE4NCwicHVyIjoiYmxvYl9pZCJ9fQ==--4054049ce191f040b71f7acec63075732aea2f14/ai-976c1c32.webp

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Category: Report
Source: https://injoys.com/en/articles/samsung-sk-hynix-ai-memory-stock-fact-check
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