Is Now a Good Time to Buy Samsung Stock? Record AI Chip Profits Collide With Wall of Investor Caution

SEOUL, South Korea — Samsung Electronics is on track for the most profitable quarter in its history, powered by soaring demand for memory chips used in artificial intelligence. Yet its shares have struggled in recent weeks, leaving investors asking whether the pullback is a buying opportunity or a warning sign.

The answer depends heavily on an investor's view of how long the AI-driven memory boom can last. Here is what the latest numbers and analysts are saying.

Record profits

On Oct. 8, Samsung released preliminary third-quarter results showing operating profit of about 107.4 trillion won ($80.2 billion), up roughly 782% from a year earlier and the first time the company's quarterly operating profit has topped 100 trillion won.

Revenue was estimated at about 195 trillion won, up nearly 127% from the same period last year. Third-quarter operating profit alone exceeded Samsung's entire operating profit for 2025.

The surge is being driven by Samsung's semiconductor business. Demand from AI data centers has created a shortage of memory chips, including conventional DRAM, NAND flash storage and high-bandwidth memory, or HBM, a specialized type of memory used alongside AI processors from companies such as Nvidia.

Samsung's HBM shipments reportedly jumped nearly 50% from the previous quarter, helped by demand for its latest-generation HBM4 chips.

Why the stock hasn't followed

Despite the record results, Samsung shares fell after the preliminary earnings were released. The company's operating profit beat many estimates, but investors had already priced in strong expectations.

"Samsung has delivered a record profit and still fallen short of expectations," Josh Gilbert, lead analyst for Asia-Pacific at investment platform eToro, said after the release.

The shares traded around 272,000 won in early October, already about 27% below their 52-week high, before sliding further. They closed at 215,500 won on Oct. 16, according to market data, even after a 2.6% gain that day.

Several concerns are weighing on the stock:

• Margin direction. Many investors are looking beyond current profits to whether margins can keep expanding. Analysts expect memory price increases to slow, with some forecasting fourth-quarter DRAM contract prices to rise 10% to 15% from the previous quarter, far less than the roughly 60% jump earlier this year.
• HBM profitability. Brokerage Bernstein has flagged continued HBM4 supply challenges and expects HBM to remain less profitable than conventional DRAM in 2027.
• Competition. Some investors worry that Chinese memory makers could narrow Samsung's technology lead. Goldman Sachs, however, has argued that the market is overestimating how quickly Chinese rivals can catch Samsung in advanced DRAM and HBM.
• Weakness outside chips. Samsung's consumer devices division, which includes smartphones and TVs, posted its first-ever quarterly operating loss in the second quarter. Analysts estimate the loss widened in the third quarter as higher memory costs squeezed device margins.

The bull case

Supporters argue that Samsung's recent share price weakness has created an opportunity.

Analysts' average target price stood at about 495,000 won as of mid-October, according to Seoul Economic Daily, more than double where the stock traded at the time. Targets vary widely, however, and do not guarantee future performance.

Bulls point to several factors:

• Prolonged chip shortage. Many analysts expect memory shortages to persist into 2027, supporting high prices and long-term supply contracts.
• HBM market share gains. JPMorgan has projected Samsung's share of the HBM market to rise to about 34% this year from 20% last year, while rival SK Hynix's share falls.
• Valuation. Because earnings have grown so quickly, Samsung's shares trade at a lower multiple of expected profits than many global chip peers.

The bear case

Skeptics caution that memory chips are a historically cyclical business. Periods of shortages and soaring prices have often been followed by oversupply and sharp price declines, as manufacturers expand capacity.

If AI spending slows, or if supply catches up with demand faster than expected, memory prices and Samsung's profits could fall. Investors are also watching for signs that the broader AI trade has become overheated.

Samsung's large weighting in South Korea's stock market also means the shares are sensitive to foreign investor flows and currency movements.

Key date ahead

The next major test comes on Oct. 29, when Samsung is scheduled to release full third-quarter results and hold an earnings call.

Unlike the preliminary figures, the full report will break down profits by division and is expected to provide more detail on HBM sales, memory pricing, and the performance of the smartphone and consumer electronics businesses. Investors will also listen closely for comments about demand and pricing in 2027.

Bottom line

Samsung's fundamentals have rarely looked stronger, with record profits fueled by the AI boom. But the stock's recent decline reflects investor uncertainty about how long those conditions can last and whether the best of the memory cycle is already priced in.

For long-term investors who believe AI demand will keep memory markets tight, the pullback may look attractive. For those worried about the cyclical nature of the chip industry, caution may be warranted until there is more clarity from the company's full earnings report.

As with any investment, financial advisers recommend that investors consider their own goals, risk tolerance and time horizon, and avoid concentrating too heavily in a single stock.

This article is for informational purposes only and does not constitute financial advice.