Samsung’s Earnings Failed To Impress: Is The Late June ‘Tech Sale-Off’ Over?
After the late-June tech sell-off, stocks rebounded on Monday as dip buyers came into play. However, by Tuesday, Samsung’s earnings report failed to impress and the stock fell.
As stocks in Asia slip again, we talked to experts and analysts to figure out which way the market could go in the future..
On Monday Bloomberg reported that dip buyers drove a rebound in tech stocks after the chip pullback of late June, which affected markets in Asia, Europe, and the United States.
However, by Tuesday morning, all eyes were set again in Asia, where the earnings report from Samsung, the world’s largest memory chipmaker, was released.
The report, seen as a major signal in the international AI and chip tech trade reporting, was met with disappointment.
Samsung announced that its second-quarter revenue increased by 129% year-on-year to 171 trillion Korean won (US$123 billion), with operating profit surging 1,810% to 89.4 trillion Korean won (US$64 billion) in preliminary figures.
Despite these numbers, the report failed to impress analysts who called it an “earnings miss” because it fell slightly short of market expectations.
Samsung’s recent performance is heavily tied to the late June tech sell-off.
Understanding the late June tech sell-off, and is it over?
Through the last days of June, media reported that tech stocks were being sold off, ‘shaking markets from Wall Street to Asia‘ and creating fears of a broader market correction.
“The selling hit AI, chip, and memory names, and it started in Asia,” Jeff Barrington, Managing Director at Windsor Drake, an M&A advisory firm and investment bank, told International Business Times.
A report that SK Hynix would slow its high-bandwidth memory expansion knocked SK Hynix and Samsung about 12% each, spilling over to U.S. semiconductors, Barrington explained.
Micron fell 13% and lost roughly $138 billion in value in a single session, with AMD, Intel, and SanDisk following, before it reached the U.S. megacaps, said Barrington.
“It is not over for good, but it is not a crash either,” said Barrington. “Micron is still up more than 260% this year, so this is a valuation shakeout inside a structural boom.”
“The selling has been concentrated in U.S. chipmakers and AI infrastructure stocks, notably Micron and SanDisk, and has spilled over into Asian semiconductor markets like South Korea,” Ryan Lee, Chief Analyst of Bitget, the world’s largest Universal Exchange (UEX) told International Business Times.
“In effect, this has not been a local sell-off, but rather a cross-market repricing of the AI supply chain,” said Lee.
“The sell-off is unlikely to be over for good, given that valuations remain elevated,” he added, noting that the worst of the pressure may begin to stabilize if earnings continue to support the AI capex story.
Is tech stock behaving abnormally?
“It does look abnormal, but the swings are rational repricing, not panic,” Barrington said. .
“The Magnificent Seven lost about $2.3 trillion in value in June,” the analyst added. South Korea’s Kospi fell 10% intraday and tripped circuit breakers, while single names swung 10% or more in a day, he added.
“What looks like chaos is the market re-rating one very crowded AI trade all at once.”
Lee cautioned that tech stocks may not be behaving abnormally. “Recent behavior necessarily doesn’t have to be tagged as abnormal, I’d say.”
“In the sense of a prelude to a storm, but obviously, the tech stocks are changing from the one-way momentum we saw earlier in the year.”
Tech stocks, especially AI and semiconductor names, had priced in strong growth expectations after a sharp rally in H1, so the pullback reflects profit-taking and valuation discipline, said Lee. “As of now, the fundamentals seem intact.”
Where did the money go?
Eugenia Mykuliak, founder & Executive Director at B2PRIME Group, a global financial services provider for institutional and professional clients, spoke about the market shifts of late June and outflows.
“To be honest, we haven’t seen any real sell-off,” she said.
“We’ve seen nothing more than a fairly deep correction, similar to the one that occurred with highly volatile tech stocks — led by Nvidia — in the summer of 2024, which the market quickly recovered from,” said Mykuliak.
“From a geographic perspective, U.S. tech funds did not see significant outflows, but there were some shifts from Latin American funds toward Asian ones — particularly South Korean funds — a trend aided by positive news about SK Hynix’s intention to list on Nasdaq via ADRs,” she added.
The money rotated; it did not leave, said Barrington. “It moved out of the mega-caps funding AI and into the suppliers selling the picks and shovels: the memory, chip and infrastructure names, then outward into the rest of the market.”
According to Lee, capital has rotated into more traditional value and cyclical sectors, particularly industrials, financials, and old-economy names.
“This has helped support the Dow Jones’ relative strength versus tech-heavy indices,” said Lee. “At the same time, some investors have moved toward cash, short-duration fixed income, gold, and assets with lower correlation to mega-cap technology volatility.”
These behaviors, Lee noted, do not suggest that investors have abandoned disruptive tech. “Rather, it points to a more selective approach, with investors less willing to pay any price for AI exposure,” he said.
What is driving tech stock worries, and is AI under a ROI test?
Citi recently warned that AI was facing an ROI test. Citi’s Scott Chronert cautioned that increasing memory prices may pressure hyperscalers to prove AI spending is delivering returns.
According to Lee, some issues worrying investors include stretched valuations and sustained debt-funded AI infrastructure spending, as well as interest rate expectations that make long-duration growth assets less attractive. Additionally, Barrington highlighted that geopolitical tensions add another risk layer, especially for semiconductor supply chains.
“Overall, this looks like a classic rotation out of crowded growth trades and into sectors with more reasonable valuations and clearer earnings visibility,” Lee said.
“Markets are moving from the AI boom towards selectively validating which of these companies could potentially cause less losses in the coming years,” Lee added. “What matters now is less whether a company is connected to AI, and more whether it can turn AI demand into revenue, margins, and durable cash flow.”
He highlighted portfolio diversification, which he notes is becoming more important because the next phase of the market will likely reward disciplined positioning across tech, value sectors, commodities, and alternative assets.
What is coming for tech, chip, and AI stocks
So what is coming for tech stocks?
Mykuliak believes that “in the near future, we may see further significant differentiation among technology companies based on their debt burdens, as the market continues to receive new evidence that inflation will remain higher-for-longer, forcing the Fed — despite general instability in the global economy — to raise the benchmark interest rate, thereby making debt more expensive to service.”
She added that “the market will surely acknowledge this and reward, first and foremost, those companies with a surplus of their own cash on hand.”
On the other hand, Barrington said that for the near term, investors should expect volatility and dispersion, not a bear market.
“Industry sales are heading for a record near $975 billion in 2026, but valuations ran ahead of it, so expect sharp two-way moves rather than a steady climb,” Barrington said.
“We can anticipate continued volatility over a sustained rally,” said Lee.
Tech stocks are likely to see sharp moves around earnings, AI capex guidance, margin updates, and macro data tied to interest rates, he added. “Quality names with strong balance sheets, real AI monetization, and clear free cash flow should hold up better,” said Lee.
“Having said that, speculative or hyped assets remain vulnerable to deeper corrections if expectations are not met,” Lee concluded.
