Samsung Electronics (GB:SMSN) (SSNLF) reported an impressive fourth quarter of 2024 results, with net income reflecting an increase of 25.77% year-over-year. The company’s bottom-line growth was driven by strong demand for high-performance chips and AI-powered smartphones. However, Samsung anticipates a challenging first quarter of 2025 due to weakness in the semiconductor market and sluggish mobile demand.
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Samsung is a South Korean multinational consumer electronics company.
Samsung Posts Upbeat Q4 Revenue Growth
The company’s revenue in the fourth quarter grew 11.8% year-over-year to KRW 75.8 trillion ($52.09 billion), due to robust performance across all segments. Further, Q4 operating profit increased by 132.14% from the year-ago quarter to KRW 6.5 trillion ($4.46 billion).
It must be noted that the company’s memory business, reported under the Device Solutions segment, achieved record-high revenue in the fourth quarter. The upside was driven by a higher average selling price (ASP) for DRAM chips due to the growing demand for high-performance memory products.
Also, in the Mobile Experience unit, sales of AI-powered smartphones such as the Galaxy S24 series, aided revenue growth.
Samsung Sees Challenges in Q1 2025
Looking ahead, the company issued a cautious outlook for its AI chip sales in the first quarter of 2025. The company cited U.S. export restrictions to China and the ongoing development of High bandwidth memory (HBM) chips as key factors impacting demand. Also, rising competition from rivals like SK Hynix, a chip supplier, is expected to impact Samsung’s semiconductor business.
However, the company expects memory market demand to start recovering from Q2 2025. Also, Samsung is currently working on an improved version of its HBM3E chips, which is expected to be launched in March.
Is Samsung a Good Stock to Buy?
Samsung’s strong presence in the consumer electronics business and memory chip sector, including AI products, positions it well for long-term growth. Furthermore, expectations of a rebound in memory chip demand later in 2025 and improving financials are encouraging. Over the past six months, the stock has declined 41.1%.
