Samsung estimated its second quarter operating profit will jump more than 1,450% year-over-year, sending its stock to a three-year high Friday morning.
The South Korean electronics giant saw its shares climb about 2.2% Friday morning to a high of 86,500 Korean won, or almost $63, CNBC reported, citing LSEG data. The company said Friday that it expects operating profit of approximately 10.4 trillion won, or $7.5 billion, for the second quarter of 2024. Last year, the company announced operating profit of 670 billion won, or about $485 million. LSEG analysts set operating profit expectations at 8.51 trillion won, according to CNBC. Samsung is expected to announce second quarter earnings on July 31.
In April, Samsung said in an earnings release that its chip division saw operating profit more than triple to 1.9 trillion won, or $1.4 billion, during the first quarter compared to the previous year, driven by artificial intelligence demand.
“As AI providers increase, the size of training data becomes proportionally bigger, leading to higher performance and data storage needs. So, we’re seeing a lot of incoming requests from the customers [for products],” Jaejune Kim, the director of Samsung’s semiconductor division, said in a call with investors.
Kim said demand for Samsung’s memory chips, or the computer chips used to store data, and its ultra-high density hard drives, were being boosted by AI. Samsung expected profit growth from AI to continue.
“The continuous increasing supply of AI servers and subsequent expansion of our associated cloud services should increase the demand for not only [our high-bandwidth memory chips], which is directly linked with AI, but also conventional servers and storage in parallel,” Kim said.