Foreign Investors Sell 7 Trillion Won Worth of Samsung Electronics and SK Hynix Shares; Fact-Check on AI Memory Earnings

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

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

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:

1. Are earnings forecasts for the next 4–8 quarters continuing to be revised upward?
2. Will the long-term contract prices for HBM and server DRAM hold steady?
3. Are customers’ AI infrastructure investment plans holding steady?
4. Is there a possibility that new capital expenditures could create an oversupply in 2027–2028?
5. 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.

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.