Home > Business > Industry

Nvidia's solid Q4 sales unable to lift Samsung, SK hynix on margin woes

Published: 27 Feb. 2025, 18:10

JIN EUN-SOO
[email protected]

The Nvidia logo is displayed on a sign at the Nvidia headquarters on February 26, 2025 in Santa Clara, California. [AFP/YONHAP]

Samsung Electronics and SK hynix shares bucked the trend of correlated movement with Nvidia's although the U.S. company reported better-than-expected fourth quarter earnings on Wednesday, as investors remained cautious about the AI chip giant’s gross margin outlook for the next quarter in light of risks posed by DeepSeek.

Nvidia reported $39.3 billion in revenue for the fourth quarter, a whopping 78 percent on-year jump that exceeded a market consensus of $38.1 billion. CEO Jensen Huang also lauded the "extraordinary" demand for its next-generation Blackwell chips despite initial heat-related setbacks.

Its share price surged 3.67 percent to close at $131.28 in the United States. It inched down by 1.5 percent in extended trading.

Samsung Electronics shares opened 0.35 percent higher on Thursday than the previous trading day and closed at 56,300 won ($39.01), a 0.53 percent drop. SK hynix opened 0.49 percent lower and closed at 199,200 won, a 1.87 percent drop, deviating from past patterns in which investment sentiment toward Nvidia and the Korean firms strongly aligned.

"Although Nvidia posted a strong performance in the fourth quarter, concerns remain for the coming quarters because the gross margin outlook of the first quarter of 2025 stayed below expectations," said Park Sang-wook, a semiconductor sector analyst at Shinyoung Securities.

Nvidia's gross margin forecast for the first quarter was 71 percent, below the consensus of 72.2 percent.

"Also, since Nvidia's financials are so strong, it will continue to be pressured by clients like Meta and Microsoft to lower its product prices. Those kinds of risks are being reflected in investor sentiment toward Samsung Electronics and SK hynix."

Concerns regarding the shocking debut of China's DeepSeek also remain.

"Although Nvidia said the emergence of DeepSeek will boost demand for its chips, uncertainty toward the company's premium chips remains as DeepSeek requires far fewer chips to offer a similar performance," Park said.

Samsung Electronics is supplying its high bandwidth memory (HBM) chips for Nvidia's less-advanced AI processors such as those downgraded for the Chinese market. SK hynix is almost an exclusive supplier of HBM chips for Nvidia's most advanced AI chips such as the Blackwell.

BY JIN EUN-SOO [[email protected]]