SK Hynix’s $750 Billion Nvidia Pact Can’t Stop a 31% Monthly Rout Ahead of Earnings
Published on 07/26/2026 at 16:02 | Redaktion boerse-global.de
The numbers coming out of SK Hynix these days read like a study in contradiction. The South Korean memory chip titan has locked in a five-year supply agreement with Nvidia worth an estimated $750 billion, yet its shares closed Friday at 1,759,000 won — down 8.34% on the day and a staggering 31.82% lower over the past month. From the 52-week high of 2,987,000 won touched on June 25, the stock has now surrendered more than 41% of its value.
The disconnect between the company’s strategic position and its stock price has rarely been starker. SK Hynix, the world’s leading supplier of high-bandwidth memory (HBM) chips for artificial intelligence accelerators, finds itself caught in a perfect storm of profit-taking, technical market mechanics, and broader sector weakness — all converging just days before its quarterly earnings report on July 29.
The Nvidia Deal That Should Have Changed Everything
Details of the landmark supply agreement emerged over the weekend, confirmed by a senior adviser to South Korea’s president during a visit to San Francisco. The pact covers a five-year collaboration in which SK Hynix will supply memory chips for Nvidia’s AI hardware. It forms part of a broader $950 billion alliance between South Korean chipmakers and US technology giants including OpenAI and Anthropic, with SK Hynix’s portion accounting for the lion’s share at roughly $750 billion in HBM and advanced AI semiconductors.
President Lee Jae-myung and Nvidia CEO Jensen Huang personally negotiated the terms. For SK Hynix, the deal cements its role at the center of the AI infrastructure buildout, even as competition in the memory chip space intensifies.
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Yet the market has so far shrugged off the news. The announcement came too late to reverse Friday’s slide, and the stock remains deep in the red.
Three Forces Behind the Sell-Off
Analysts point to a trio of factors driving the rout, none of which fundamentally undermine the company’s AI-driven growth story.
First, sector-wide profit-taking hit AI stocks after Alphabet’s latest quarterly report triggered a wave of selling across the semiconductor complex. SK Hynix was swept up in the broader downdraft alongside peers like Samsung Electronics, which helped push South Korea’s benchmark KOSPI index down 9% on the worst day — forcing the Korea Exchange to halt trading for 20 minutes.
Second, a Seoul court ruling added an unwelcome layer of uncertainty. SK Group Chairman Chey Tae-won was ordered to pay a divorce settlement worth nearly $1 billion, raising questions about ownership structures at the conglomerate’s highest level.
Third — and perhaps most critically for the near-term price action — technical market mechanics are exerting powerful downward pressure. The US listing of SK Hynix American Depositary Receipts (ADRs) in early July created a new valuation benchmark that investors are still struggling to calibrate. On the first day of trading in New York, the ADRs surged 13% after the company raised over $26 billion in the largest-ever foreign IPO on a US exchange, selling shares at $149 each.
But the euphoria faded quickly. By mid-July, Seoul-listed shares suffered their biggest single-day loss in nearly two decades — a plunge of more than 15% — as investors cashed out gains from the Nasdaq rally. Market observer Yoo noted that the ADRs were trading at a discount of more than 20% to the Korean-listed shares, an anomaly compared with TSMC’s ADRs, which command a premium of roughly 13-14% over their home-market stock.
The IPO itself also increased the float, adding selling pressure unrelated to fundamentals. “The additional shares in the market boosted trading volume — a purely mechanical factor,” Yoo explained.
Adding to the technical headwinds, the conversion window between the US ADRs and Korean shares opens on July 29, which is already compressing the premium on the US-listed securities and generating additional selling pressure in Seoul.
What the Numbers Say
Despite the carnage, SK Hynix remains up 170.74% year-to-date — a reminder of just how far the stock had run before the recent pullback. The relative strength index now sits at 40.1, suggesting the stock is approaching oversold territory without being there yet.
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The earnings report due Wednesday carries enormous weight. The consensus estimate from 14 local banks calls for a record operating profit of 64.1 trillion won on revenue of 84.1 trillion won, driven by demand for HBM3E and HBM4 memory chips. If those figures materialize, first-half 2026 operating profit would surpass 100 trillion won for the first time — a milestone that would underscore just how profitable SK Hynix’s specialized AI memory business has become.
Strategists remain broadly bullish on the underlying thesis. Cloud providers continue to build out AI infrastructure at breakneck speed, keeping demand for high-bandwidth memory chips elevated and preserving pricing power for manufacturers like SK Hynix and Micron. The recent sell-off, they argue, looks temporary in the context of structural AI demand that still outstrips supply.
The Week Ahead
Investors will be watching Wednesday’s earnings call for answers to two critical questions. First, does management’s outlook confirm the revenue trajectory implied by the Nvidia deal? Second, how specific will the board be about the planned $26.5 billion investment program for next-generation production facilities?
The report arrives with SK Hynix shares trading 41.11% below their 52-week high — a gap that either represents a buying opportunity or a warning that the AI rally had simply run too far, too fast. The next few days will determine which narrative prevails.
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SK Hynix Stock: New Analysis - 26 July
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