Samsung's Record Profit Meets Falling Stock Price: Peak Semiconductor Theory Versus the AI Infrastructure War

KOSPI and KOSDAQ Both Slide

The KOSPI widened its intraday decline to as much as 1.8%, dropping to the low 7,500s, while the KOSDAQ fell more than 3.8% to slip below the 800-point mark. Foreign investors sold across both cash and options markets, while institutions, including pension funds, bought roughly 1 trillion won worth of KOSPI shares to cushion the decline.

Later in the session the KOSPI trimmed its loss to about 0.7%, recovering above the 7,600 level as LG Electronics and SK Hynix led gains that supported the index. The KOSDAQ, however, stayed weak, holding a decline of more than 3%.

The hosts advised against aggressive buying or selling, especially leveraged positions, during such volatile sessions, and recommended setting a personal loss threshold in advance and trimming portfolio exposure by 30 to 40% if that threshold is breached.

Samsung Electronics: Record Earnings, Falling Stock

Samsung Electronics posted an operating profit of roughly 57 trillion won in the first quarter and about 89 trillion won in the second, a record pace, yet its share price still declined, splitting market interpretation. Morgan Stanley issued a report arguing that the narrow, semiconductor-led rally has run its course and recommending underweighting semiconductors in favor of hyperscalers.

The hosts pushed back, arguing that the AI ecosystem and semiconductor demand are effectively inseparable, making the report's logic a circular argument that artificially splits the two. They also noted Morgan Stanley's track record of past bearish semiconductor calls, including its earlier winter-is-coming report, which it later walked back.

Kiwoom Securities cut its target price for Samsung Electronics from 430,000 won to 390,000 won, citing a slowdown in second-half EPS growth and intensifying HBM4 competition from Chinese memory makers. The hosts called the direction reasonable but disputed using slower growth as grounds to lower the target, given the sheer scale of roughly 100 trillion won in quarterly profit, while Hyundai Motor Securities kept its target at 440,000 won, framing the stock's only real flaw as having already earned and risen too much.

Big Tech Keeps Funding AI Investment, Even With Debt

Amazon is reportedly preparing to issue at least $25 billion in corporate bonds to fund AI infrastructure investment. With hyperscalers' capital expenditure now exceeding operating cash flow, markets are watching closely as these companies shift from spending cash reserves to raising debt.

The hosts argued that AI-related spending should be understood as investment, not cost, and that companies are borrowing simply because they can and because it makes sense to. Stopping investment now would turn everything spent so far into a sunk cost and effectively concede the AI race, they said, framing the current wave of aggressive spending as a healthy signal rather than a warning sign.

Still, an internal U.S. Treasury report reportedly flagged that AI-related firms are now far more deeply intertwined with financial markets and the real economy than during the dot-com bubble. That interconnection, the hosts noted, may be exactly why the U.S. government has continued to backstop the ecosystem, including its stakes in OpenAI and Intel.

China Moves to Treat AI as a National Strategic Asset

China is reportedly considering restricting overseas access to its top domestic AI models, a move seen as treating cutting-edge AI as a critical national asset requiring control. Alongside this, DeepSeek is reported to be developing its own AI chips.

Having built global market share through an open, open-source strategy, China now appears to be shifting toward monetizing access to its models while also showing confidence that its top-tier models can compete without being shared externally. The hosts noted that if China moves ahead with large-scale data center investment, it could open up a substantial new source of semiconductor demand.

Rep. Lee Hae-min on the Three Mega-Projects and Power Policy

Rep. Lee Hae-min said the government's decision to bundle semiconductors with AI data centers and physical AI into three mega-projects reflects the fact that all three are linked through demand, and was necessary to keep generating sustained demand for the semiconductor industry. She noted that Asia still lacks an AI data center hub, and that Korea, Japan, Australia, and Indonesia are all competing to capture hundreds of trillions of won in pent-up regional demand.

She stressed that the initiative was not designed to favor any single company, but rather to first build an environment any company could enter and let firms decide afterward, arguing that recent framing of the project as a regional political conflict obscures the real issue of global supply-chain competition.

On power policy, she explained that a dedicated tariff for data centers and provisions allowing direct power purchase agreements (PPAs) between generators and consumers had been deleted from the government's revised bill before recently returning to discussion, arguing that stable power supply and a reasonable rate structure are essential to capturing hundreds of trillions of won in pending demand. She also urged government ministries to move past turf-protecting instincts and act with urgency toward the national goal, warning that letting the initiative become a one-off event would cost the startup community's trust.

Lee Kwang-soo's Take: The Scale Never Lies

Analyst Lee Kwang-soo addressed the disconnect between Samsung's record profits and its falling share price by invoking Benjamin Graham's metaphor that markets behave like a voting machine in the short run but a weighing machine in the long run, always eventually reflecting a company's true substance. Using a dog-walking analogy, he described earnings as the owner and the stock price as the dog on a leash, noting that the distance between them may widen temporarily but the dog inevitably follows the owner's direction.

He advised against reacting to any single report without considering the track record of the institution behind it, and pushed back on using slowing second-half growth rates as grounds to cut target prices, arguing that demanding ever-higher scores from a company already earning around 100 trillion won each quarter is an unreasonable standard.