Samsung Posts Record Operating Profit of 107.4 Trillion Won on Strong Memory Demand
Key Facts
Samsung Electronics reported record quarterly revenue of 195.3 trillion won and record operating profit of 107.4 trillion won in the third quarter of 2026, according to a company statement. Operating profit was far above the 12.2 trillion won recorded in the same period a year earlier, according to Reuters. The company said memory demand remained strong, driven by artificial intelligence applications, contradicting the draft’s account of slowing chip demand. The semiconductor division posted revenue of 147.1 trillion won and operating profit of 106.5 trillion won during the quarter. Samsung said, "Memory demand momentum is strong," while its results did not include the two figures the draft attributed to net profit and analyst forecasts.
Samsung’s results put the memory sector at the center of the investment cycle tied to AI infrastructure, rather than on a clear path of declining demand, according to the company. Samsung and SK Hynix together account for about two-thirds of the global memory market, according to the Associated Press, making their performance a broadly relevant indicator for chip supply chains. Reuters noted that SK Hynix’s results exceeded market expectations, while Samsung did not change its previous guidance. The report quoted an analyst at BNK Investment & Securities as saying that SK Hynix’s results "far exceeded market expectations." Samsung said the tight chip market could persist through 2028 because building new plants takes time.
Samsung’s capital expenditure totaled about 29 trillion won in the third quarter, and the company expects total spending in 2026 to reach about 84.4 trillion won. It also forecast continued investment in AI infrastructure in the fourth quarter of 2026, with capital spending on that infrastructure reaching a historic level in 2027. These forecasts provide a different context from the claim that Microsoft and Alphabet’s spending came in below expectations, a claim not supported by the available facts. Microsoft reported revenue of $92.3 billion in its first fiscal quarter of 2027, up 19% year over year, while Azure revenue rose 48%. Alphabet, for its part, said it expects a significant increase in capital spending in 2027.
Alphabet’s results showed, however, that revenue growth did not prevent misses against expectations on key measures. The company’s revenue rose 25% year over year to $127.58 billion in the third quarter of 2026, below analysts’ average estimate of $127.97 billion, according to FactSet, the Associated Press reported. Net income was $26.17 billion from July to September, compared with $34.98 billion in the same period of 2025. Earnings per share were $2.12, versus estimates near $3.01. By contrast, Google Cloud revenue increased 103% to $30.7 billion, making the segment the driver of the company’s revenue growth, the agency said.
Alphabet shares reflected the earnings disappointment, falling more than 10% to $289.95 in after-hours trading on Wednesday, October 28, according to the Associated Press. That move differs from the draft’s description of Intel and Micron shares falling after Samsung’s announcement; the available data do not establish how the two stocks moved after hours. Micron shares, by contrast, rose 4.8% in Wednesday trading, reaching their highest level in more than two weeks after SK Hynix’s strong results, according to Reuters via Investing.com. In Thursday morning trading, October 29, Samsung shares fell as much as 6.2% after opening higher, while SK Hynix rose 0.7%. The moves show differing investor reactions across the sector, rather than a uniform decline in chip stocks.
Attention is turning to upcoming technology-company spending disclosures. Alphabet’s chief financial officer said further details of the capital-spending plan would be presented during the fourth-quarter earnings call, with a significant increase expected in 2027. In the memory sector, Samsung expects investment in AI infrastructure to continue through the fourth quarter of 2026, with spending on that infrastructure then reaching a historic level in 2027. The company also said its board would set the next shareholder-return policy and a plan for distributing the remaining 2026 returns at a meeting scheduled for late January 2027. The third-quarter results carry a mixed message: record revenue and profit at Samsung and strong memory demand, alongside Alphabet missing revenue and earnings expectations. Microsoft, meanwhile, recorded growth in revenue and Azure, while the available evidence does not support describing the two companies’ capital spending as below expectations.