Samsung Electronics Posts Record Profit, Yet Kospi Plunges 6% as ETF-Leverage Sell-off Domino Takes Hold

Samsung Electronics posted preliminary second-quarter revenue of 171 trillion won and operating profit of 89.4 trillion won. The result far exceeded the consensus estimate of 84.8 trillion won, marking an earnings surprise and the company's largest quarterly profit on record. Revenue rose 27.7% and operating profit jumped 56% from the prior quarter. Excluding an estimated 20 trillion won bonus provision, operating profit would have topped 110 trillion won, according to some estimates.

Samsung's quarterly operating profit surpassed those of global tech giants including Nvidia, Apple, Microsoft, Amazon, and TSMC, effectively making it the world's most profitable company for the quarter. Even so, shares tumbled 8-9% intraday, extending a 13-session streak of foreign net selling that pushed foreign ownership to its lowest level in 16 years. Brokerages largely attributed the decline to technical profit-taking and rebalancing-driven selling unrelated to the earnings themselves.

SK hynix showed early signs of a strong debut ahead of its U.S. ADR listing, drawing cornerstone investors on the first day of book-building. UK asset manager Baillie Gifford, U.S. hedge fund Coatue, and AI-focused investor Situational Awareness together committed to purchase about $7 billion worth of shares, securing roughly 25% of the offering in advance. Given its undervaluation relative to Micron despite leading the HBM market, expectations are building for a re-rating once it trades in the U.S.

Hanwha Ocean lost out on Canada's submarine program, with Ottawa naming Germany's Thyssenkrupp Marine Systems as preferred bidder. The decision was widely attributed to Germany's broader NATO alliance ties and its ability to reshuffle existing delivery schedules with Norway and other allies as part of an economic and diplomatic support package. Hanwha Ocean shares plunged about 23% to the high-80,000-won range, erasing a year's worth of gains, a drop seen as excessive given the company's recent destroyer order win and role in the U.S. shipbuilding partnership (MASGA). Thyssenkrupp, in contrast, surged more than 10% on the German market.

Despite the broader earnings jitters, cosmetics and consumer names rallied. Clio jumped more than 10%, while Amorepacific and Aromatica also advanced, and Samyang Foods rose 8.9%. Cosmetics exports to the U.S. kept growing even amid concerns over new tariffs on small parcels, and investors are betting that the gap between cosmetics exports and sector stock performance will narrow with a lag. Inbound-consumption plays such as casinos, department stores, convenience stores, and hotels/resorts also gained.

Reports that Nvidia's next-generation server rack has been delayed more than a year to 2028 due to overheating issues rattled the supply chain. Because the racks will continue relying on cable connections between boards rather than the anticipated new interconnect, Credo Technology surged, while forecasts for the optical-connectivity and PCB/substrate markets came under downward pressure.

Rival AMD, seen as a relative beneficiary, jumped nearly 10% intraday and Goldman Sachs raised its price target to $640. Broadcom also rallied on news that its custom-chip supply agreement with Apple has been extended through 2031.

Tesla surged 6-7% on news of an expanded robotaxi rollout in the Miami area, recouping much of the sharp drop that followed last Thursday's delivery report. Morgan Stanley set a $415 price target, citing likely expansion to Phoenix, Orlando, Tampa, Las Vegas and New Orleans by year-end, while JPMorgan maintained its $475 target.

Microsoft announced layoffs of about 4,800 employees, roughly 2% of its workforce, concentrated in the Xbox division, describing the move as organizational efficiency rather than AI-driven displacement; D.A. Davidson reaffirmed its buy rating.

SpaceX was added to the Nasdaq-100 index on the day, and Treasury officials confirmed that co-founder Gwynne Shotwell donated two million shares to fund Trump accounts. The company also merged its AI unit xAI into SpaceX and rebranded as SpaceX xAI.