South Korean electronics manufacturer Samsung has issued a profit warning that has caused ripple effects in the stock market, affecting several major technology companies.
According to Samsung, its operating profit for the fourth quarter is expected to be 35% lower than the previous year, which is below market expectations. As the world’s largest producer of memory chips, smartphones, and televisions, Samsung’s earnings report, due later this month, is being highly anticipated. Following the announcement, Samsung’s shares closed 2.4% lower in South Korea. However, it is worth noting that the company does not have American depositary receipts.
The concerns about weakened demand have extended to US shares as well. In premarket trading, Apple experienced a 0.4% decline, while Meta, the parent company of Facebook, also saw its shares drop by the same percentage. Additionally, Amazon and Google-parent Alphabet both faced a 0.5% decrease. Likewise, futures for the tech-heavy Nasdaq index were trading lower as well.
One of the reasons behind Samsung’s disappointing performance is its failure to capitalize on the increasing demand for artificial intelligence chips in the past year. In stark contrast, Nvidia, a rival in this sector, has seen its stock reach record highs, closing at an all-time high on Monday and continuing to trade positively in premarket trading.
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