Samsung, SK Hynix Spike Then Fade Despite S&P's Bullish Nod

S&P Global Ratings raised Samsung Electronics' outlook to positive from stable on July 21, flagging a memory supercycle so strong it could support a full credit upgrade within two years — and traders spent the next session proving just how nervous that optimism still is, sending Samsung and SK Hynix shares into double-digit intraday swings before both gave most of it back.

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What Happened

S&P kept Samsung's long-term issuer rating at AA- and short-term rating at A-1+, but moved the outlook to positive, citing an expected two-year run of stronger operating performance driven by AI-fueled memory demand and Samsung's strengthened position in high-bandwidth memory (HBM). The agency forecasts Samsung's revenue hitting roughly 683 trillion won in 2026 and 821 trillion won in 2027 — both records — with EBITDA surging from about 91 trillion won in 2025 to roughly 393 trillion won in 2026 and 502 trillion won in 2027. S&P also pointed to Samsung's HBM4 edge, which pairs 1c DRAM with a 4-nanometer base die and has largely resolved the yield problems that dogged its prior-generation HBM3E chips. As I broke down in S&P Lifts Samsung's Outlook to Positive on AI Memory Boom, the agency expects the memory shortage to persist at least through 2028, as hyperscaler capital spending on AI data centers is projected to roughly quadruple from 2024 levels to about $1 trillion by 2028.

Why It Matters — The Market Reaction Wasn't Simple

The upgrade landed as validation, not a surprise catalyst — and the stock reaction on July 22 showed just how jittery this rally has become. The Kospi opened at 7,052.09 on the back of Samsung and SK Hynix gains, with Samsung surging as much as 6.56% intraday and SK Hynix spiking 9.26% to touch 2,006,000 won. By the close, most of that had evaporated: Samsung finished up just 0.58% at 260,500 won, and SK Hynix actually closed down 0.33% at 1,830,000 won. That followed a prior session where Samsung had already jumped 6.15%, putting the two-day gain above 10% at the peak before fading. Local financial media described the session as resembling a "gambling den," with chip stocks swinging as much as 8% in a single day even as underlying earnings hit record highs.

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Who's Affected

The reversal caught retail investors off guard — reports noted traders who had panic-sold Samsung shares during the recent dip were left regretting it as the stock ripped higher, only to watch gains shrink again by the close. The volatility isn't isolated to Samsung: SK Hynix, Samsung's main HBM rival and the other pillar of Korea's chip export boom, moved in near lockstep, and the broader Kospi's swings tracked both stocks almost tick for tick. That whipsaw pattern echoes what I flagged in Samsung Dips, Kospi Tags 7,000 Again as 'Too Cheap' Case Builds — a market that keeps agreeing the fundamentals are strong while still struggling to hold a trade through a full session.

What to Watch Next

Traders pointed to caution ahead of Alphabet's earnings, due before the Korean market opened on July 23, as a key reason gains were pared back late in the session — a reminder that Samsung and SK Hynix's AI-memory story is now tightly linked to the capital-spending signals coming out of U.S. hyperscalers. Whether that spending pace holds is central to whether Samsung can grow into the record capex it's committing to build out HBM4 capacity, a bet I examined in UBS's 8,100 Call Hides an $820B Power Bill Nobody's Pricing In. Investors will also be watching whether S&P's positive outlook translates into an actual ratings upgrade over the next two years, and whether Samsung's next earnings report confirms the EBITDA trajectory the agency is now forecasting.

This is not financial advice — always do your own research before making investment decisions.

The Takeaway

S&P's move is a genuine vote of confidence in Samsung's memory-driven earnings power, backed by real numbers — record projected revenue, quadrupling EBITDA, and a technological edge in HBM4. But July 22's price action shows the market hasn't fully priced in confidence yet: even a credit-positive headline couldn't stop Samsung and SK Hynix from giving back most of a double-digit intraday spike by the close. The fundamentals and the price action are telling two different stories right now, and until AI capex signals from names like Alphabet stabilize, that gap is likely to keep producing sessions this volatile.