SK Hynix's share price is displayed at the dealing room of Hana Bank's headquarters in Seoul on Friday. [Yonhap]
SK Hynix's share price is displayed at the dealing room of Hana Bank's headquarters in Seoul on Friday. [Yonhap]

Samsung Electronics and SK Hynix both surged more than 20% in early trading Friday as fears that AI investment had peaked rapidly dissipated.

A string of strong earnings from major US technology companies reaffirmed that AI spending is translating into real profits, quickly lifting investor sentiment that had weighed on semiconductor stocks in recent sessions. The two flagship Korean chipmakers had failed to find upward momentum even after posting record earnings on Thursday. They reversed course within a single day, prompting a wave of strong buy recommendations from brokerages.

As of 10 a.m. Friday, Samsung Electronics was trading up 23.19% at 256,000 won ($178) and SK Hynix was up 27.61% at 1.69 million won, according to the Korea Exchange.

The opening surge was steep. SK Hynix shot up as much as 28.37% within three minutes of the open, while Samsung Electronics jumped as much as 25.60% during trading. Circuit breakers were triggered on both stocks immediately after the open, yet both maintained gains of around 20% afterward.

The rebound erased in a single session the losses accumulated over the previous three trading days. Samsung Electronics had fallen 19.34% and SK Hynix 29.9% between Monday and Thursday, fully reflecting market anxiety over a slowdown in AI investment and fears that the memory chip cycle had peaked.

Overnight, however, a series of US earnings reports reaffirming the sustainability of AI investment turned market sentiment completely around.

Amazon was at the center of the rally. The company reported second-quarter sales of $200.61 billion, up 20% from a year earlier, crossing the $200 billion quarterly revenue mark for the first time. Sales at its cloud unit AWS surged 36.7%, and both its AI business and its in-house chip business each posted annualized revenue exceeding $25 billion.

Notably, the market did not react negatively even though AI investment pushed annual free cash flow into negative territory.

Instead, investors focused on net profit more than tripling year-on-year to $62.62 billion, partly reflecting the impact of its investment in Anthropic — confirming that AI spending is generating real returns rather than merely adding costs. Amazon shares rose 3.9% in regular trading and surged an additional 8% in after-hours trading.

Microsoft also demonstrated the profitability of AI investment. After reporting results that far exceeded market expectations following Thursday's close, the company surged 15.51% in a single session, adding approximately $450 billion to its market capitalization — a record. The results confirmed AI and cloud growth momentum, and Microsoft's announcement that it would maintain its capital expenditure plan for the year helped ease market concerns.

Semiconductor stocks rallied across the board. The Philadelphia Semiconductor Index jumped 8.19%, while Micron gained 18.36%, SanDisk 25.99%, AMD 13.00% and Intel 11.30%. SK Hynix's American depositary receipts also surged 17.52%, recovering to their offering price.

Apple, by contrast, drew a cool market reception despite beating expectations, partly because its AI investment has been comparatively modest.

Apple reported April-to-June quarter sales of $109.42 billion, up 16.4% from a year earlier and the best result ever for that quarter, with earnings per share of $2.02 topping the consensus estimate of $1.89. Still, concerns over memory supply shortages and rising component prices pushed the stock down 1.41% in regular trading, with further weakness in after-hours trading.

Brokerages continued to issue strong buy recommendations on memory chipmakers including Samsung Electronics and SK Hynix. Seo Seung-yeon, an analyst at DB Securities, maintained a strong buy call on Samsung Electronics with a target price of 360,000 won.

"Multi-year memory supply agreements with Big Tech companies are expected to provide a more stable memory business structure than past cycles," Seo said. "The recent share price decline to around 1.1 times the projected 2027 price-to-book ratio, driven by doubts over AI investment returns, makes this a valid entry point for bottom-fishing."

Son In-jun, an analyst at Eugene Investment & Securities, also maintained a strong buy rating on SK Hynix with a target price of 3.7 million won.

"The core of the recent share price correction was not memory demand but concerns over the sustainability of AI investment," Son said. "Given that AI infrastructure investment is expanding into a competition at the national level, the likelihood of a slowdown is limited, and we maintain a strong buy on the memory sector."


th5@heraldcorp.com