Samsung Electronics Co.’s unexpected $16.5 billion AI chipmaking deal with Tesla has reinvigorated investor confidence in the company, pushing its stock up nine per cent since the announcement.
Samsung’s unexpected $16.5 billion AI chipmaking deal with Tesla has boosted the company’s stocks by nine per cent.
The surge brings Samsung’s gains in July to over 20 per cent, setting the stock on course for its best month in more than four years.
The agreement marks a significant shift for Samsung’s foundry business, which has struggled in recent years to compete with Taiwan Semiconductor Manufacturing Co. and has relied heavily on internal orders.
Analysts at Citigroup noted that the deal signals a transition towards deeper external partnerships, a move that could boost Samsung’s credibility and expand its client base.
“I think market basically paid not even zero value – negative value – on foundry business so far, and suddenly market checked and said ‘Okay! they still can do’,” said Young Jae Lee, senior investment manager at Pictet Asset Management Ltd. – which holds Samsung as the biggest position in its $831 million fund.
The deal also secures long-term utilisation of Samsung’s Taylor, Texas facility, which had faced construction delays but is now expanding with the support of the U.S. Chips and Science Act.
Gary Tan, portfolio manager at Allspring Global Investments, said: “Tesla’s AI6 chip announcement validates Samsung’s advanced nodes at its US fab, an endorsement that stands out amid Intel’s well publicized struggles with domestic manufacturing.”
Morgan Stanley analysts estimate the Tesla partnership could add more than $50 billion to Samsung’s market value.
However, some experts remain cautious. Haris Khurshid, chief investment officer at Karobaar Capital, warned: “Samsung now has the narrative tailwinds and the cash flow support to justify more constructive positioning, but it still needs to prove execution in AI chips beyond just this Tesla headline.”
Samsung is expected to share further details on the Tesla deal and its second-half outlook during its earnings report today (31.07.25).
Samsung’s AI chip deal with Tesla breathes new life into company as stocks rise
