Jordan Klein, Mizuho's technology, media and telecom sector specialist, wrote in a note on Tuesday that markets have reacted too sharply to Samsung's preliminary results for the second quarter. Klein framed the recent sell-off among semiconductor names as a momentum-driven unwind instead of evidence of worsening fundamentals.
Highlighting the profit details, Klein said Samsung's revenue shortfall is visible versus expectations, but that operating profit represents "a strong beat if you exclude one-time bonus expenses." He estimated that implied memory operating margins exceed 80%, a level he described as highly significant.
"That OP in a single quarter is more than Samsung reported in total for past three years combined," Klein wrote, adding that responding to Samsung's share moves based solely on preliminary results "is extremely short-sighted."
Klein argued the revenue weakness Samsung reported is more likely concentrated in mobile devices, TVs and LCD panels, rather than the memory business. He emphasized that investors should focus on Samsung's outlook for the memory segment and the industry into the second half of 2026, with company comments and guidance expected at the end of July.
On broader memory-market dynamics, Klein pointed to reports indicating that third-quarter DRAM and NAND pricing appear likely to be considerably stronger compared with second-quarter levels. He noted some market forecasts imply NAND could rise 35 to 40% quarter-on-quarter.
Looking at the wider semiconductor earnings calendar, Klein said the upcoming results from TSMC and ASML will matter more for semiconductor price action than Samsung's preliminary numbers. He expressed a constructive view on both companies, saying he feels "very good overall about fundamentals and longer-term outlook for both," and that their valuations appear attractive.
Turning to the CPU market, Klein referenced a bullish server CPU forecast from Asian hardware analyst Dale Gai, which has increased his optimism on Intel and the broader CPU semiconductor call, including DRAM suppliers. He also characterized weakness in AMD shares as a potential buying opportunity ahead of AMD's AI-focused event on July 23.
The note from Klein links several near-term elements investors should watch: Samsung's formal commentary on memory demand and pricing into 2H26, third-quarter DRAM and NAND pricing trajectories, and upcoming results from major semiconductor equipment and foundry names. Together, he suggested, these factors will be more informative for share-price direction than preliminary headline revenue numbers.
Summary
Mizuho analyst Jordan Klein said Samsung's preliminary Q2 revenue miss has prompted an excessive market reaction. He pointed to very strong implied memory operating margins once one-time items are excluded, argued the revenue softness likely stems from non-memory businesses, and highlighted coming company commentary and peer earnings as the main catalysts for semiconductor price action.
Key points
- Samsung's operating profit, excluding one-time bonus expenses, is a substantial beat with implied memory operating margins above 80%.
- Weakness in Samsung revenue is attributed more to mobile devices, TVs and LCD panels than to the memory segment; investors should watch Samsung's memory outlook at the end of July.
- Third-quarter DRAM and NAND pricing reportedly look much stronger versus Q2, with some forecasts indicating NAND could rise 35-40% quarter-on-quarter; upcoming TSMC and ASML results are likely to influence semiconductor market direction.
Risks and uncertainties
- Market reaction may continue to be driven by momentum and sentiment rather than fundamentals, affecting semiconductor and technology equity volatility.
- Samsung's preliminary revenue guidance leaves open uncertainty about the contribution of non-memory businesses; final company commentary at the end of July is necessary to clarify the memory outlook.
- Third-quarter pricing forecasts for DRAM and NAND are based on reports and estimates; if pricing does not strengthen as indicated, semiconductor supplier earnings and sentiment could be affected.
Tags: Semiconductor, Memory, Earnings, CPUs