Micron Technology (NASDAQ:MU) shares slid 4.9% in premarket trading on Tuesday after pronounced declines in the share prices of South Korean memory chip leaders. SanDisk also moved lower, falling 4.7% in the same session.
The selling followed Samsung Electronics (KS:005930) publishing its second-quarter operating profit estimate, which showed a dramatic year-over-year increase but nonetheless coincided with weakness across the memory chip space.
Samsung put April-June operating profit at 89.4 trillion won, equivalent to $58.44 billion using the figure cited by the company, up from 4.7 trillion won in the same period a year earlier. That operating profit estimate exceeded an LSEG SmartEstimate of 87.3 trillion won. The company also forecast revenue of 171 trillion won for the quarter, a 129% rise from the prior year, according to its regulatory filing.
Despite the sizable profit gain that the company attributed to AI-driven demand for memory chips, shares of Samsung and SK Hynix fell sharply. Those declines carried over into U.S. trading, where Micron was pushed lower in what market participants described as sympathy trading.
Samsung, the world s largest memory chipmaker, is slated to publish detailed quarterly results later this month that will include a division-level breakdown of earnings. Investors will be watching that release for greater clarity on the drivers behind the company s sizable top-line and operating profit estimates.
The retreat in Micron shares mirrors a broader pullback in memory chip stocks after the South Korean companies reported or forecast results that, while showing strong profit expansion, coincided with negative market reactions. The episode highlights the sensitivity of memory-related equities to shifts in investor sentiment across major global suppliers.
Summary
Micron fell in premarket trading after Samsung and SK Hynix shares dropped sharply. Samsung s April-June operating profit was estimated at 89.4 trillion won, up from 4.7 trillion won a year earlier, with revenue forecast at 171 trillion won, up 129% year-over-year. The company s profit estimate beat an LSEG SmartEstimate of 87.3 trillion won. Despite these figures and AI-related demand for memory, the South Korean stocks fell and pressured U.S. peers.
Key points
- Micron shares declined 4.9% in premarket trading, while SanDisk shares fell 4.7%.
- Samsung estimated April-June operating profit of 89.4 trillion won, up from 4.7 trillion won a year earlier, exceeding an LSEG SmartEstimate of 87.3 trillion won.
- Samsung forecast revenue of 171 trillion won for the quarter, a 129% year-over-year increase; nevertheless, Samsung and SK Hynix shares dropped and pulled down other memory chip stocks.
Risks and uncertainties
- Market reaction risk - Even large, year-over-year profit increases can coincide with sharp share price declines, as shown by Samsung and SK Hynix, which can transmit volatility to related U.S. memory chip stocks.
- Sector concentration risk - The memory chip segment remains sensitive to investor sentiment across a few large suppliers; weakness among those suppliers can exert outsized pressure on the broader memory chip sector.
- Information transparency risk - Detailed, division-level results from Samsung are pending later this month, and the lack of that granularity may contribute to continued uncertainty for market participants.