Markets MU JUL 07, 2026

Samsung's record AI quarter breaks the tape — Nasdaq off 1.16%, PHLX chip index down 4.65%

Samsung shares fell as much as 8% in Seoul despite a 1,800% operating-profit forecast, dragging Micron −4.7% and the SMH more than 3% lower as a Reuters DeepSeek chip scoop compounded the rout.

BY HENLEY MARRAST · MARKETS DESK

Samsung Electronics guided to an 1,800% jump in operating profit on Tuesday, posted a quarterly figure that eclipsed both Nvidia and Apple, and promptly watched its Seoul-listed shares fall as much as 8%. That’s the tell of this tape. When the best-possible print from the world’s largest memory maker can’t clear the bar, the bar itself is the story.

The damage spread quickly. The Nasdaq Composite closed down 1.16% at 25,818.69, the S&P 500 slid 0.45% to 7,503.85, and the Dow gave back 130.76 points to 52,925.15 after tagging an intraday record earlier in the session. The PHLX chip index fell 4.65%, the VanEck Semiconductor ETF (SMH) dropped more than 3%, and the losses inside the index were uniform in a way that signals positioning rather than fundamentals: Intel −9%, Sandisk −7.3%, Marvell Technology, Lam Research and Applied Materials all off more than 6%, AMD around −6%, and Micron −4.7%.

“The reaction to Samsung speaks to one of the biggest risks facing markets over the coming weeks,” Adam Crisafulli of Vital Knowledge wrote in a note cited by CNBC, arguing Q2 prints will land strong in absolute terms but into “very bullish” expectations, with the S&P roughly 1,000 points higher than heading into Q1.

Then Reuters landed the second punch. Citing three people familiar with the matter, it reported that DeepSeek, the Chinese startup slated in June to raise $7 billion at a $52–$59 billion valuation, has been developing its own AI inference chip for about a year, and is in talks with chip-design, foundry and memory partners. In April, DeepSeek released a V4 model adapted for Huawei’s Ascend chips. The 2020s equivalent of the January DeepSeek shock has become a recurring genre.

Mike Bailey, director of research at FBB Capital Partners, put it plainly: “Expectations are up, and fundamentals are struggling to meet these high sky-high demands.”

Micron is still up 229% year-to-date and Sandisk up 581%. The PHLX index is still up roughly 74% on the year. This wasn’t a repricing of the AI trade. It was a reminder of how much of it’s already priced.

Sources

About the author

Henley Marrast

MARKETS DESK

Henley Marrast covers AI-equity flow, accelerator demand, and earnings prints for AI Sheet Report. She leads coverage of the public AI complex from the New York markets desk, with a focus on the daily tape and quarterly results. She has been writing about technology markets for several years.