Samsung Q3FY26 Results: Operating profit hits $80.2 billion, tops Nvidia
- Operating profit guided at KRW 107.4 trillion ($80.2 billion), surpassing Nvidia's $63.7 billion
- Record sales of KRW 195 trillion ($145.76 billion), up roughly 127% YoY
- Operating margin expands to ~55%, reflecting strong pricing power in HBM and DRAM
- Shares fell 2.4% as revenue estimates trailed FactSet consensus of KRW 206.8 trillion
- AMD CEO Lisa Su visited Seoul to secure HBM4 supply for MI455X accelerators
*this image is generated using AI for illustrative purposes only.
Samsung Electronics Co. Ltd. (OTC: SSNLF) guided third-quarter operating profit at KRW 107.40 trillion ($80.20 billion), surpassing Nvidia Corp.'s $63.7 billion and marking a shift in the AI chip profitability hierarchy.
This preliminary estimate exceeds the LSEG SmartEstimate consensus of KRW 106.1 trillion ($79.33 billion). Sales are projected to reach a record KRW 195 trillion ($145.76 billion), up roughly 127% from the prior year. Despite the strong guidance, shares in Seoul closed 2.4% lower, pressured by revenue estimates trailing FactSet consensus of KRW 206.8 trillion and currency headwinds.
Profitability shifts to memory makers
The surge in Samsung's profits reflects a broader industry trend where memory manufacturers are capturing value from artificial intelligence demand. High-bandwidth memory (HBM), critical for AI accelerators, has seen supply constraints allow for significant pricing power.
Micron Technology Inc. (NASDAQ: MU) earned $44.3 billion in its most recent quarter, exceeding Alphabet Inc. ($40.7 billion) and Microsoft Corp. ($40.6 billion). SK Hynix Inc. (NASDAQ: SKHY) posted $38.9 billion, ahead of Apple Inc. ($35.7 billion). Together, these three memory makers generate approximately $163 billion in quarterly operating profit.
| Rank | Company | Quarter | Operating Profit |
|---|---|---|---|
| 1 | Samsung Electronics | Q3FY26 (est.) | $80.2 billion |
| 2 | Nvidia Corp. | FQ2FY27 | $63.7 billion |
| 3 | Saudi Aramco | Q2FY26 | $57.6 billion |
| 4 | Micron Technology | FQ4FY26 | $43.8 billion |
Strategic partnerships deepen
Advanced Micro Devices Inc. (NASDAQ: AMD) CEO Lisa Su recently visited Seoul to secure long-term memory supply, meeting with Samsung chip division head Jun Young-hyun and SK Hynix CEO Kwak Noh-jung. AMD relies heavily on both companies for HBM to pair with its AI processors.
Under a March agreement, Samsung serves as the primary HBM4 supplier for AMD’s MI455X accelerator. Additionally, Samsung is developing DDR5 memory for AMD’s next-generation EPYC server processors and Helios systems. This underscores the strategic dependency of logic chip designers on memory suppliers in the current AI hardware race.
Market reaction and internal pressures
While operating profit surged, Samsung faces internal cost pressures from higher chip prices, which increase smartphone manufacturing costs. The company reportedly plans to cut fourth-quarter smartphone production by 20% to 30%. Furthermore, the won has strengthened about 12% against the dollar over three months, reducing the won-value of overseas sales.
Shares have roughly tripled over the past year but trade more than 25% below June’s record high. The stock fell less than 1% initially on the guidance release before closing down 2.4% during the Asian session.
What the numbers show
Samsung is now retaining approximately $55 of operating profit for every $100 of sales, a margin profile more typical of software companies than semiconductor manufacturers. This divergence between revenue growth (127% YoY) and profit expansion indicates that pricing power, rather than volume alone, is driving the bottom line. The gap between Samsung’s guided profit ($80.2 billion) and Nvidia’s reported profit ($63.7 billion) highlights how the bottleneck in memory supply has shifted economic leverage from chip designers to fabricators.
How might Samsung's potential 20-30% cut in Q4 smartphone production impact its overall revenue mix and consumer market share in the coming quarters?
Will the strengthening of the Korean won against the dollar continue to erode the USD-denominated profitability of Samsung's overseas sales in future reporting periods?
Could the current HBM supply constraints and pricing power for memory makers persist if new fabrication capacities come online, or will this lead to a rapid margin compression?
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