Samsung's profits may rise by unbelievable 1,400% amid AI frenzy

Samsung Electronics anticipates a remarkable surge in profits of over 1,400% for the second quarter of 2024 compared to the same period last year. This projection follows an upswing in the prices of advanced chips, driven by the current artificial intelligence (AI) boom. Renowned as the world's largest producer of memory chips, smartphones, and televisions, the South Korean tech giant witnessed a substantial tenfold profit increment in the initial three months of this year. This is prepared by SSP.

Samsung foresees its profit for this quarter to reach 10.4 trillion won ($7.54 billion; £5.9 billion), surpassing market analysts' expectations of 8.8 trillion won. The mounting demand for AI chips in data centers and smartphones is a primary driver behind this positive outlook. The enticing prospects linked to AI have contributed to the market's bullish trend over the past year, culminating in record highs for the S&P 500 and the Nasdaq in the United States.

Nvidia, the chip-making titan, exemplifies this trend as its market value exceeded $3 trillion briefly, affirming its status as the world's most valuable company. Consequently, the AI frenzy boosting Nvidia's fortunes has also fueled the earnings growth of Samsung and the entire industry. Chief analysis at Tokyo-based research and advisory firm ITR Corporation, Marc Einstein, voiced enthusiasm, underlining the soaring demand for AI chips as a pivotal factor behind the sector's upward trajectory.

Samsung Electronics, serving as the flagship division of the esteemed Samsung Group, is poised for further developments. However, potential turbulence looms ahead as the tech giant faces a potential three-day strike next week. Workers within the company's union are calling for a more transparent bonus and time-off system, posing a potential challenge for the corporation's operations.