Samsung Electronics anticipates a 15-fold increase in profits for the three months ending June 2024 compared to the same period last year.
The surge is driven by a booming demand for artificial intelligence (AI), which has elevated prices for advanced chips and boosted the firm’s second-quarter outlook.
As the world’s largest producer of memory chips, smartphones, and televisions, the South Korean tech giant’s announcement spurred a more than 2% rise in Samsung shares during early trading hours in Seoul.
Earlier this year, the company reported a more than 10-fold increase in profits for the first quarter.
For the current quarter, Samsung projects profits to reach 10.4 trillion won ($7.54 billion; £5.9 billion), up from 670 billion won last year, surpassing analysts’ expectations of 8.8 trillion won, according to LSEG SmartEstimate.
“Right now we are seeing skyrocketing demand for AI chips in data centers and smartphones,” said Marc Einstein, chief analyst at Tokyo-based research and advisory firm ITR Corporation.
Optimism about AI is one reason for the broader market rally over the last year, which pushed the S&P 500 and the Nasdaq in the United States to new records on Wednesday.
The market value of chip-making giant Nvidia surged past $3tn last month, briefly holding the top spot as the world’s most valuable company.
“The AI boom which massively boosted Nvidia is also boosting Samsung’s earnings and indeed those of the entire sector,” Mr Einstein added.
Samsung Electronics represents the leading division of the South Korean conglomerate Samsung Group.
Next week, the technology giant could confront a potential three-day strike scheduled to commence on Monday. The workers’ union is advocating for a more transparent system regarding bonuses and time off.