U.S. tech giants and South Korea's semiconductor leaders are set to announce their second-quarter earnings, marking an 'AI earnings super week.' Following Alphabet's recent announcement of better-than-expected results and a reaffirmation of its commitment to expanding AI investments, market attention is now focused on Microsoft, Meta, Apple, Amazon, as well as Samsung Electronics and SK Hynix.
According to the financial investment industry on July 26, earnings reports from key companies in the AI ecosystem will be concentrated this week in the U.S. Microsoft and Meta will release their results after the market closes on July 29, followed by ARM, Qualcomm, and Lam Research. On July 30, Apple, Amazon, and Monolithic Power (MPWR) will also report their earnings. Prior to that, semiconductor equipment firms like KLA and NXP Semiconductors will announce their results on July 28.
In South Korea, SK Hynix will report its earnings on July 29, followed by Samsung Electronics, LG Energy Solution, LG Electronics, Samsung SDI, SK Innovation, and POSCO Holdings on July 30. Notably, Samsung Electronics and SK Hynix are considered key players in the AI memory market, making their results critical indicators for both the domestic stock market and the global semiconductor industry.
Expectations for this earnings season are high. Samsung Electronics has already indicated a potential 'earnings surprise' with preliminary results showing second-quarter sales of 171 trillion won and operating profit of 89.4 trillion won, exceeding market consensus. The operating profit marks an 1810% increase compared to the same period last year, setting a new record. SK Hynix is also expected to report its highest-ever earnings, with estimates suggesting second-quarter sales of 84.6 trillion won and operating profit of 64.1 trillion won, surpassing last year's annual operating profit in just one quarter.
Market participants are paying closer attention to the management's outlook for the second half of the year rather than just the earnings figures. Following Alphabet's earnings surprise, which included a raised capital expenditure forecast by $15 billion and a reaffirmation of its AI investment strategy, data from Hana Financial Investment shows that the average stock price returns for Samsung Electronics and SK Hynix have reached 11% and 17%, respectively, in the month following the announcement.
Seo Sang-young, a researcher at Mirae Asset Securities, stated, 'This earnings season will serve as a process to confirm whether the investment cycle across the AI supply chain, including memory, semiconductor equipment, and power semiconductors, remains valid, starting with big tech. The key will be whether the expansion of AI investments translates into actual improvements in sales, profits, and free cash flow (FCF), as well as how future investment plans and guidance are presented.'
However, there is a possibility of increased volatility following the earnings announcements. Seo noted, 'After the earnings reports, the delta hedging by options market participants and the portfolio adjustments by institutions and foreign investors may lead to differentiation by sector and increased volatility in individual stocks. Particularly, stocks reporting earnings tend to experience higher implied volatility (IV) ahead of their announcements, so it is essential to monitor not only the results but also the guidance and conference call content.'
* This article has been translated by AI.
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