Samsung Electronics reported a preliminary second-quarter operating profit of 89.4 trillion won ($58.4 billion), a 19-fold increase from a year earlier and a record for the world’s largest memory-chip maker. Revenue rose 129 percent to 171 trillion won, exceeding analyst estimates. Yet the shares tumbled as much as 10.1 percent in Seoul, closing down 6.9 percent, and dragged the benchmark Kospi index to a 4.9 percent loss. The sell-off erased more than $100 billion in market value and triggered circuit breakers during the session.

The sharp decline reflected a market that had already priced in the AI-driven boom. Samsung’s stock had more than doubled this year before the results, and investors now demand not just strong earnings but clear evidence that the pricing power for memory chips can be sustained. Analysts in Seoul and fund managers pointed to fears that the massive investments in AI data centres by US technology companies could slow, and that supply bottlenecks in high-bandwidth memory (HBM) might ease, leading to overcapacity. A Reuters report that Chinese startup DeepSeek is developing its own AI inference chip, aiming to reduce reliance on Nvidia and Huawei, added to concerns about a more fragmented hardware market.

The ripple effects extended across global markets. On Wall Street, the Nasdaq Composite fell, with chipmakers Micron, Marvell, and Nvidia all declining. European technology shares also slipped, though energy stocks gained as oil prices rose after a tanker was struck near the Strait of Hormuz, reviving geopolitical tensions. In a notable rotation, Indian IT services stocks such as TCS and Infosys rose as much as 4 percent, as some investors shifted from richly valued AI hardware names to software firms that have been beaten down on fears that AI could erode their billing models. The Kospi’s decline was the sharpest among major Asian markets, while Tokyo, Taipei, and Shanghai also ended lower.

The episode marks a critical juncture for the AI investment narrative. Samsung’s full quarterly report, due on 30 July, will provide divisional details and forward guidance that could either calm or deepen the unease. Meanwhile, the release of the Federal Reserve’s June policy meeting minutes on Wednesday will be watched for clues on the interest-rate outlook, a key factor for high-valuation tech stocks. The market’s reaction to record profits has underscored the fragility of current valuations and the high bar that the AI trade must now clear.