Samsung Electronics saw its share price drop sharply this week after issuing preliminary second-quarter earnings results. The stock fell 6.9% on the Korea Exchange Tuesday, and closed the week off 7.9%.
The move came despite what looks like a record quarter, with operating profit roughly 19 times higher than a year earlier. Given Samsung’s role as a bellwether for AI infrastructure spending, the selloff raised questions about whether investors are becoming more selective.
“The announcement in and of itself was constructive,” said Kathrin Forrest, equity investment director at Capital Group in Toronto.
In an interview on Wednesday, she told me that her read was primarily “buy the rumour, sell the news,” rather than a sign of unease about the AI trade. “A lot of optimism had been built into the stock price leading into the earnings announcement.”
Indeed, Samsung shares are up 138% year to date.
SK hynix, one of the world’s largest memory-chip manufacturers and a key supplier to the AI industry, was swept up in the broader selloff. By mid-week, shares had fallen 14% from their recent high before recovering to end the week down 10.1%.
Both companies are part of what Capital Group calls the Emergent Seven in its 2026 Midyear Investment Outlook. “The top seven companies by market capitalization in the MSCI Emerging Markets Index are all tech, making up 36% of the index,” according to the report. “They have smaller market capitalizations and lower valuations than many of their U.S. counterparts.”
The group represents a shift to “higher value sectors within emerging markets,” according to the report.
“Memory chips have moved increasingly into the spotlight,” Forrest said. “As we move from AI model training to AI model inference, we need much more memory. … That’s where SK Hynix and Samsung Electronics have seen a meaningful increase in demand with very meaningful order backlogs as well.”
Inference is a key investment theme. As the technology becomes more capable, it’s expected to create greater economic value.
Investors’ enthusiasm for AI has produced unusually high levels of market concentration. The Magnificent Seven represent about one-third of the S&P 500’s market value. J.P. Morgan’s mid-year outlook estimated that 65–80% of the index’s gains since the launch of ChatGPT can be attributed to the AI theme.
“There are opportunities that we continue to see with regard to that broader AI infrastructure buildout,” Forrest said. “But there’s an acknowledgement that market leadership does evolve over time. Companies that dominate today may not [do so] for years. This technological change that we’re observing is creating a lot of opportunities.”
The news wasn’t all bad for SK hynix on Friday. The company completed a US$265-billion Nasdaq listing by issuing new American depositary receipts, backed by newly issued shares. It’s the largest foreign-share offering ever completed in the U.S.
