AI Expectations Hit a Fever Pitch

Motley Fool Hidden Gems Investing

The Motley Fool

Investing, Business

4.3 • 3.1K Ratings

🗓️ 7 July 2026

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

Every quarter recently, semiconductor stocks keep churning out incredible numbers. And every quarter, it seems as those companies somehow “miss expectations”. The most recent example was when Samsung Electronics reported a 1,900% increase in profits, the stock dropped so much it halted trading on the Korean composite index. Lou, Matt, and Tyler dig into the expectations game Wall Street is playing and the underlying trends still supporting it. Plus, defense companies are making moves at the NATO summit and investor questions. Have a question? Email us; podcasts@fool.com Want to take the next step in your investing journey? Explore Motley Fool’s Epic for our portfolio-centered investing experience, premium research, tools, and guidance: fool.com/epic fool.com/epic Tyler Crowe, Matt Frankel, and Lou Whiteman discuss: - Samsung’s big profits and big stock drop - Amazon’s $25 billion debt deal - Lockheed Martin goes underwater - Are defense companies ready for the changing landscape? - Mailbag: How to navigate the Sunk Cost Fallacy? Companies discussed: SSLNF, MU, HXSCL, AMZN, GOOG, LMT, NOC, KTOS, AVAV, LHX, BOC, RKLB Host: Tyler Crowe Guests: Matt Frankel, Lou Whiteman Engineer: Dan Boyd Disclosure: Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, “TMF”) do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode. Learn more about your ad choices. Visit ⁠⁠megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Meeting lofty AI earnings expectations today on Motley Fool Hidden Gems Investing.
0:07.0	Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by longtime Fool Contributors, Lou Whiteman, and Matt Frankel.
0:16.0	We're going to talk about defense companies later in the show, talking about some of the big moves that are happening in the industry lately, and as well as hitting letters or questions.
0:23.3	But before we get started today, you know, hyperscalers, those builders of AI, they just keep spending more and more.
0:30.3	And semiconductor companies are posting record results, but even that doesn't seem to satisfy the market.
0:35.7	Samsung Electronics reported by what I think any measure
0:38.9	would be a resoundingly successful quarter, but the stock dropped so much that it caused a circuit
0:44.7	breaker suspension of trading on the entire Korean composite stock price index today. Those losses
0:51.2	have carried more or less over into the semiconductor space today, as many
0:55.4	memory and processing chip manufacturers are down as of this morning. So, guys, how on earth
1:01.2	did we go from profits up 19 times compared to this time last year at Samsung to stop the entire
1:08.0	Korean stock market? Yeah. So, I mean, a lot to unpack there.
1:11.6	So a lot of these stocks were priced for not necessarily perfection,
1:15.6	but to report blowout quarter after blowout quarter after blowout quarter.
1:19.6	When you expect a blowout and you get, as you called it, a resounding successful quarter,
1:23.6	it's enough to make the stock drop.
1:26.6	We've seen this with several recent earnings
1:28.8	reports and not just in the memory space and several of Nvidia's reports look fantastic and the
1:33.1	stock ends up falling. In Samsung's case, yes, you're right, they are expecting a roughly 19 times
1:39.2	increase in quarterly operating profit, but that's being driven by AI memory demand. And investors seem to be
1:47.1	questioning whether or not the AI memory chip rally has gotten ahead of itself. And it's not just
1:52.0	Samsung. If you look at Micron, for example, even before today's kind of sympathy drop, it was down
	...

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