Seoul's Kospi dives as Samsung profit fails to halt tech rout

South Korea's Kospi plunged about 5% on Tuesday, leading losses across a mixed Asian session, as Samsung Electronics shares tumbled roughly 7% even after forecasting a more than 1,800% jump in second-quarter operating profit—signalling that blockbuster chip earnings are no longer enough to reassure investors worried the AI-fuelled rally has peaked.

The drop deepened a two-week rout that has erased roughly 20% from a Kospi that had more than doubled to a June record high. Seoul could not follow Wall Street, where all three major U.S. indexes rallied after the long weekend on gains in Amazon and Apple, easing recent nerves over whether massive AI spending will pay off.

Key Takeaways

• The Kospi fell about 5% to 7,645.37 in early trade, with Samsung dragging chip-heavy Seoul lower despite record profit guidance.
• Asian markets were split: Tokyo, Shanghai and Wellington fell, while Hong Kong, Singapore, Taipei, Manila and Jakarta gained.
• Monday's U.S. rebound—S&P 500 up 0.7% near a record, Nasdaq up 1.1%—failed to lift Korean sentiment as profit-taking hit semiconductors.
• Samsung guided Q2 operating profit to surge more than 1,800% on sustained AI memory demand, yet shares still sold off sharply.
• Volatility across AI hardware names is testing whether elevated valuations can hold as investors weigh competition and overcapacity risks.

Why did the Kospi fall after Samsung's record profit forecast?

Investors treated Samsung's preliminary second-quarter numbers as a cue to lock in gains rather than celebrate. The company said operating profit is expected to jump more than 1,800% year on year, driven by AI-related demand for memory chips. Independent reports put the figure at 89.4 trillion won, with revenue more than doubling.

Yet Samsung shares still slid about 7% in early Seoul trade, pulling SK Hynix and other chip-linked names lower with them. The pattern fits a broader shift: after semiconductors wrapped a record quarter, headlines about capacity additions, delays and debt loads that once seemed benign are now triggering selloffs across the Future Tech & AI Wonders trade.

How did other Asian markets perform on Tuesday?

Seoul led the region's weakness on a mixed day. Losses extended to Tokyo—another tech-heavy market—along with Shanghai and Wellington. Hong Kong, Singapore, Taipei, Manila and Jakarta posted gains, while Sydney was little changed.

In Japan, the Nikkei 225 fell about 1.8%, with chip equipment maker Tokyo Electron down 3.4% and memory maker Kioxia shedding 10.7%. Hong Kong's Hang Seng slipped 0.4%, Shanghai's composite lost 1%, and Taiwan's Taiex declined 1.8%. Australia's S&P/ASX 200 edged 0.3% lower, while India's Sensex ticked 0.1% higher.

What sparked the Wall Street rebound that Asia could not match?

U.S. markets reopened Monday from the holiday weekend with a tech-powered lift. The S&P 500 rose 0.7% to 7,537.54, pulling within about 1% of its all-time high even though most index constituents fell. The Nasdaq composite climbed 1.1% to 26,121.16, and the Dow Jones Industrial Average added 0.3% to a record 53,055.91.

Chip and AI names led the charge. Broadcom jumped 3.7% after announcing long-term silicon supply agreements with Apple, while Nvidia said its product roadmap remained intact after a server-delay report jolted Asian tech earlier. SK Hynix also began formal marketing for its U.S. listing. Still, that momentum stalled at the Pacific: Seoul's Kospi sold off sharply as traders questioned whether AI infrastructure spending can generate enough returns to justify today's prices. For full market context, see Yahoo Finance's Asia markets wrap.

Is the AI chip trade running out of road?

The Kospi's slide underscores how concentrated and volatile the AI hardware trade has become. South Korea's benchmark had more than doubled in 2026 before June's peak, then shed roughly a fifth of its value in the weeks that followed. Samsung's tumble on stellar guidance suggests the market may already have priced in near-term chip euphoria.

Bloomberg's markets wrap noted that after back-to-back selloffs in chipmakers, a relief bounce in U.S. tech offered hope the AI trade still has room to run—but Tuesday's Asian action showed investors are far from convinced. Until clearer evidence emerges that AI spending translates into durable earnings growth, the Kospi and its chip giants look set to remain on a wild ride.