Buying More Samsung Electronics and SK Hynix After the AI Chip Stock Plunge: 4 Conditions to Check Before Betting on a Rebound
On 2026-10-21, Samsung Electronics and SK Hynix closed up 5.67% and 5.81%, respectively, recovering from the previous day's sharp declines. However, a single-day rebound does not confirm that it is time to buy more shares. Investors need to assess earnings sustainability, semiconductor demand, expectations already priced into the stocks, and portfolio exposure.
When stock prices rebound quickly the day after a sharp decline, as they did this time, investors can easily find themselves caught between two concerns.
One is regretting not buying when prices were lower. The other is feeling pressured to buy immediately before prices potentially fall again.
However, when deciding whether to buy additional shares of Samsung Electronics or SK Hynix, the important question is not simply how far their stock prices have fallen. Investors should first determine whether there is sufficient justification for making a new investment at current prices and whether they can withstand further declines.
How Much Have Samsung Electronics and SK Hynix Shares Recovered on October 21?
Samsung Electronics and SK Hynix both declined on October 20 before rebounding sharply on 21. However, because the two stocks recorded different percentage declines and subsequent gains, investors should not assume that a strong rebound means their previous prices have been fully recovered.
| Category | Samsung Electronics | SK Hynix |
|---|---|---|
| Change on October 20 | -4.13% | -6.81% |
| Change on October 21 | +5.67% | +5.81% |
| Closing Price on October 21 | KRW 223,500 | KRW 1,294,000 |
Based on the regular trading session close on 2026-10-21. Each daily percentage change is measured against the previous trading day's closing price.
The important point is that percentage declines and gains cannot simply be added together to calculate the actual cumulative return.
For example, if Samsung Electronics fell 4.13% and then rose 5.67%, assuming its price before the decline was 100, the calculation would be as follows.
100 × 0.9587 × 1.0567 = approximately 101.31
This means the combined price movement over the two trading days represents an increase of approximately 1.31%.
Applying the same calculation to SK Hynix gives the following result.
100 × 0.9319 × 1.0581 = approximately 98.60
Across the two trading days, this represents a decline of approximately 1.40%.
These figures are calculated using published daily percentage changes. Rounding differences may arise compared with calculations based directly on actual closing prices in Korean won.
In other words, Samsung Electronics rose above its pre-plunge level, while SK Hynix had not yet returned to that level.
Even when two stocks post similar percentage gains on the same day, the extent to which investors have actually recovered their losses can differ.
Why Can Samsung Electronics Shares Fluctuate Despite Strong Earnings?
Improving earnings and rising share prices are not the same thing. Even when a company's profits increase, its stock price may move differently depending on investor expectations, the sustainability of future earnings, and how much anticipated growth is already reflected in its valuation.
In its preliminary 3-quarter earnings announced on 2026-10-08, Samsung Electronics reported consolidated revenue of KRW 195,000,000,000,000 and operating profit of KRW 107,400,000,000,000.
Compared with the previous quarter, revenue increased 13.70% and operating profit rose 20.01%.
However, these are preliminary results, not finalized earnings based on completed financial statements. The profitability of individual business divisions and detailed operating conditions will need to be examined further when final results are released.
To understand why a stock can fall despite improving earnings, investors need to distinguish between two questions.
First, is the company actually generating strong profits?
Second, is its current share price reasonable relative to the profits it is expected to generate in the future?
Even if the answer to the first question is positive, the answer to the second is not necessarily positive.
If the stock price already assumes a high growth rate, earnings growth alone may not be enough to justify further gains.
Therefore, investors considering additional purchases of Samsung Electronics should examine not only revenue and operating profit growth but also semiconductor business profitability, the direction of next-quarter earnings, and the earnings expectations already reflected in the share price.
Is Checking HBM Demand Enough When Evaluating SK Hynix?
HBM demand is an important factor when deciding whether to buy more SK Hynix shares, but increasing demand alone does not establish that the stock is an attractive investment.
HBM, or high-bandwidth memory, connects multiple DRAM chips vertically to enable high-speed data processing. It is one of the key memory product categories used in AI accelerators.
As investment in AI infrastructure expands, HBM production capabilities and profitability become important factors in evaluating a company's earnings.
However, investors should distinguish between the following factors.
Whether demand for AI servers is increasing
Whether expanded HBM supply is translating into actual revenue and profits
How memory prices and production costs are affecting profitability
Whether future production capacity expansion is keeping pace with demand growth
In particular, even when demand increases, product prices and profitability may develop differently if supply expands more rapidly.
As of 2026-10-21, securities firms also hold differing views on the semiconductor industry outlook.
Some analysts believe AI infrastructure investment will support memory demand over the long term. Others warn that high memory prices and expanded production capacity could create future supply-demand pressures.
Rather than treating either outlook as a certain prediction of the future, it is more reasonable to monitor actual quarterly earnings and changes in customer demand.
What Should Investors Compare Before Buying More Samsung Electronics or SK Hynix?
Instead of comparing the two stocks simply by ranking how far their prices have fallen, investors should evaluate the relevant investment conditions for each company separately.
| Evaluation Factor | Samsung Electronics | SK Hynix |
|---|---|---|
| Earnings | Distinguish semiconductor division earnings from company-wide profits | Memory business profitability |
| AI Demand | HBM supply expansion and earnings contribution | Sustainability of HBM demand and supply |
| Valuation | Division-level earnings and valuation levels | Memory earnings outlook and valuation levels |
| Key Variables | Profit and loss from non-semiconductor businesses | Memory prices and capital expenditure |
Samsung Electronics operates several businesses beyond semiconductors, including mobile devices and displays. Therefore, even when semiconductor industry conditions improve, company-wide profits can still be affected by the performance of other divisions.
For SK Hynix, investors need to focus more closely on memory business earnings and the future supply-demand outlook.
Another important consideration is comparing price-to-earnings ratios (PER) and price-to-book ratios (PBR) using consistent standards.
PER is calculated by dividing the share price by earnings per share, while PBR is calculated by dividing the share price by book value per share.
However, in an industry such as semiconductors, where earnings can fluctuate significantly, a low PER at a particular point in time does not necessarily mean a stock is undervalued.
When current earnings are unusually high, PER may appear low. If earnings subsequently decline, PER can rise even if the share price remains unchanged.
Conversely, expectations of substantial future earnings growth do not automatically justify a high share price.
Before buying additional shares, investors should distinguish historical earnings from projected earnings and determine whether those projections are being confirmed by actual financial results.
How Much Can Averaging Down Reduce Your Average Purchase Price?
Averaging down means purchasing additional shares at a price below the original purchase price to reduce the average cost per share.
Although this lowers the average purchase price, it also increases the amount invested, potentially increasing the monetary loss if the stock falls further.
Suppose an investor buys 10 shares of a stock at KRW 100,000 and the price subsequently falls to KRW 80,000.
The original investment is KRW 1,000,000, while the current market value is KRW 800,000.
If the investor then purchases another 10 shares at KRW 80,000, the total amount invested becomes KRW 1,800,000, and the total number of shares held increases to 20.
The average purchase price is calculated as follows.
(KRW 1,000,000 + KRW 800,000) ÷ 20 shares = KRW 90,000
The average purchase price falls from KRW 100,000 to KRW 90,000.
But what happens if the stock price falls again from KRW 80,000 to KRW 70,000?
An investor who did not buy additional shares would still hold 10 shares and would have an unrealized loss of KRW 300,000 relative to the original investment.
By contrast, an investor who purchased another 10 shares would hold 20 shares, resulting in an unrealized loss of KRW 400,000 relative to the total investment of KRW 1,800,000.
Even though the investor successfully reduced the average purchase price, the total monetary loss actually increased.
This is a simplified calculation excluding fees and taxes. It is not a simulation using actual Samsung Electronics or SK Hynix share prices.
Ultimately, the key question when averaging down is not how much the average purchase price can be reduced, but whether the investor can tolerate the increased risk of losses associated with committing more capital.
Conditions That May Support Additional Purchases and Situations Where Waiting Makes Sense
Decisions about additional purchases should depend more on whether the original investment thesis and financial plan remain valid than on the stock price decline itself.
For example, investors can consider the following conditions.
First, does the original earnings outlook remain intact?
Even if the share price has fallen, investors should determine whether the evidence supporting the company's ability to generate profits remains valid. If the earnings outlook has deteriorated, investing more simply because of the original purchase price may be risky.
Second, is the current share price reasonable relative to expected earnings?
A substantial decline from a previous high does not, by itself, establish that a stock is undervalued. Investors need to compare the company's current valuation with its future earnings outlook.
Third, can the investment plan withstand further declines?
If an investor plans to buy additional shares using money needed for near-term living expenses or loan repayments, stock price volatility could create financial pressure.
Fourth, is too much of the portfolio concentrated in one industry?
Even when an investor holds both Samsung Electronics and SK Hynix, the two companies are affected by the common factor of semiconductor industry conditions.
Buying shares in two different companies does not necessarily provide sufficient industry diversification.
This is particularly important for investors who already hold semiconductor-related ETFs, as their actual exposure to the semiconductor industry may be higher than expected.
Conversely, if the earnings outlook is uncertain, available investment cash is insufficient, or the investor has not established an acceptable loss limit in the event of further declines, choosing not to rush into additional purchases is also worth considering.
What Should Investors Continue Monitoring After the October 21 Rebound?
The October 21 rebound in Samsung Electronics and SK Hynix is a confirmed market outcome, but it does not establish the direction of future share prices.
On that day, foreign investors reportedly made net purchases of approximately KRW 472,200,000,000 in Samsung Electronics and approximately KRW 200,600,000,000 in SK Hynix.
Foreign investor net buying can be a useful reference for understanding market supply and demand. However, one day's net buying does not establish that the trend will continue.
Going forward, investors should examine foreign trading activity alongside corporate earnings announcements, memory industry conditions, and changes in market earnings expectations rather than relying on foreign trading flows alone.
For Samsung Electronics, an important next step following its preliminary 3-quarter results is to examine finalized earnings and profitability by business division.
For SK Hynix, investors should assess how memory product supply and demand, pricing trends, and future investment plans are reflected in actual earnings expectations.
When share prices are moving sharply over short periods, investors should be cautious about making decisions based solely on a single price target or one day's trading flows.
Samsung Electronics and SK Hynix are both connected to the AI semiconductor market, but their business structures and profit-generating models are not identical.
Rather than buying additional shares of both companies simply because their prices have fallen, investors are better served by evaluating each company's earnings, valuation, and portfolio weighting separately.
Investors who are already experiencing losses should consider whether they would still choose the same stock if they were investing for the first time today, rather than becoming anchored to their original purchase price.
Reducing the average purchase price is mathematically possible, but whether the additional purchase proves to be a good investment will ultimately depend on the company's subsequent earnings and share price performance.
Related Articles
Weinstein 30-Week Moving Average Breakout: 4 Conditions to Check Before Buying