Samsung Electronics Co. Ltd. (OTC: SSNLF) just released a bigger quarterly operating profit than Nvidia Corp. (NASDAQ: NVDA).
The memory stocks that should have cheered the news fell anyway, and they fell together.
Micron Technology Inc. (NASDAQ: MU) was down 4.6% on Thursday afternoon. SanDisk Corp. (NASDAQ: SNDK) lost 5.2% to $1,604 per share, while the U.S.-listed shares of SK Hynix Inc. (NASDAQ: SKHY) slid 5% to $169.
The Roundhill Memory ETF (CBOE: DRAM) fell 5.1%.
It is the second synchronized drop this week. On Tuesday, Micron fell 1.7%, SanDisk 2.6% and SK Hynix 6.4% after a Toshiba expansion plan revived fears of a supply glut.
Analysts at Cantor Fitzgerald and Mirae Asset Securities say those fears are overdone.
Investors are not convinced yet.
Samsung's Record Was Not Enough
Samsung said its third-quarter operating profit likely reached 107.4 trillion won, or about $80.2 billion. That is nearly nine times the year-earlier figure and roughly 26% more than Nvidia's latest quarterly operating profit.
However, revenue of about 195 trillion won, or roughly $146 billion, trailed a FactSet consensus of 206.8 trillion won. Samsung shares closed 2.4% lower in Seoul.
For a stock up nearly 200% over the past year, a good result was no longer enough.
Cantor Fitzgerald Says The Toshiba Fear Is Overdone
At the end of last week, Japanese memory maker Toshiba announced plans to roughly double its nearline hard-drive capacity, the high-capacity disks used in data centers, by fiscal 2027.
More supply can eventually mean lower prices.
Cantor analysts led by C.J. Muse called the selloff unwarranted in a note this week, describing a case "where the headline is worse than reality."
"We believe the magnitude of the sell-off is unwarranted," he added.
According to Cantor, most of Toshiba's growth comes from packing more storage into each drive, not from making many more drives.
Demand still runs ahead of supply, and long-term contracts with data-center customers support rising prices.
Cantor estimates Toshiba holds only a low-teens market share and kept its bullish stance through 2030.
Mirae Asset Sees A Tighter Market
Mirae Asset analyst Young-gun Kim reiterated Buy ratings on both Korean chipmakers on Oct. 6.
For Samsung, Kim kept a 400,000 won target, about $300, implying 44.9% upside.
"We expect memory supply/demand conditions to be tighter in 2028 than in 2027," Kim said. Much of next year's output is already committed, and new factories mostly come online from late 2028.
For SK Hynix, Kim kept a 3.1 million won target, about $2,300, implying 68.4% upside.
"Concerns over HBM pricing also appear excessive," Kim said. Conventional DRAM prices have surged so much that suppliers could shift capacity away from HBM, forcing customers to pay more.
He expects HBM margins to rise further in 2027.
Not everyone agrees.
Last month, Bernstein analyst Mark Li cut his SK Hynix target to 2.7 million won from 3.3 million won, citing weaker HBM pricing and supply issues, while keeping an Outperform rating.
What The Drop Does And Does Not Say
No analyst above sees demand weakening. The debate is about prices and timing.
After gains of several hundred percent in a year, these stocks move as a single trade. For now, the market is trading the headlines.
