SK Hynix’s Wipeout: How a $26.5 Billion Nasdaq Triumph Spawned a 36% Seoul Meltdown
Published on 07/20/2026 at 13:32 | Redaktion boerse-global.de
A stock that should have been celebrating its transatlantic coming-out party is instead nursing one of the steepest monthly declines in its history. SK Hynix shares are trading at 1,764,000 won in Seoul, shedding 4.23% on the day and a staggering 36.18% over the past 30 days. The rout has erased nearly 41% of the value from the record high of 2,987,000 won reached on June 25, leaving the relative strength index at a deeply oversold 38.9 and the stock’s annualized volatility pegged at roughly 126%. The question pinballing through trading desks is whether this is a necessary cleansing of excess optimism or the first real crack in the artificial-intelligence memory narrative.
The triggers were anything but singular. On the surface, the trouble began with SK Hynix’s Nasdaq debut on July 10, when it raised $26.5 billion through American Depositary Receipts in an offering that was reportedly seven times oversubscribed. What was meant to be a capstone of global investor confidence instead turned into a wave of profit-taking that, on the worst day, sent the Seoul-listed stock down 15.4% — a record single-day plunge — and dragged the Kospi index into a 9% freefall that triggered a 20-minute market-wide trading halt. That was only the opening act. A spike in the Brent crude price above $90 a barrel on US-Iran tensions added macroeconomic jitters, while reports that Chinese AI model Kimi K3 from Moonshot AI had narrowed the performance gap with US rivals to just two or three months fed fresh fears about competitive pressure. Meanwhile, TSMC’s revised capex plan of $60–64 billion was interpreted by some investors as a harbinger of future overcapacity, pulling Samsung Electronics and SK Hynix lower before both partially recovered intraday.
Beneath the news headlines, a more structural force was at work. South Korean retail investors had poured roughly 14 trillion won into leveraged exchange-traded funds since late May, including the 2x KODEX SK Hynix product. That fund crashed about 70% from its June peak, prompting regulators to raise the minimum cash deposit for trading single-stock leveraged ETFs from 3 million won to 30 million won. The forced deleveraging amplified the selling pressure. To make matters worse, newspaper reports pointed to arbitrage trading between the newly listed ADRs in New York and the home-market shares, adding an extra layer of mechanical volatility to the Kospi’s gyrations.
Should investors sell immediately? Or is it worth buying SK Hynix?
Against this backdrop, several analysts argue the selloff has overshot the fundamentals. Hana Securities’ Lee Jae-man notes that spot prices for DRAM memory have actually risen 7% over the past month, with $4.5 billion flowing into DRAM ETFs since July. He reminds the market that after positive surprises from Alphabet, Samsung and SK Hynix have historically gained 11% and 17% respectively within a month. NH Investment & Securities’ Kim Byung-yeon pegs the Kospi bottom at 6,000 points and puts SK Hynix’s fair price-to-book ratio between 1.3x and 1.4x. Morgan Stanley has lifted its forecast for third-quarter DRAM average selling prices to a 21% quarter-on-quarter increase, well above TrendForce’s 13–18% consensus, while KB Securities sees memory supply next year approaching a full-blown shortage. On Wall Street, Wall Street Zen upgraded the ADR (ticker SKHY) to Strong Buy — following Singular Research’s earlier bullish call — and Barclays rates it Overweight with a $330 target. DS Investment’s Seoul target stands at 3.1 million won.
Yet the bear camp has ammunition of its own. NH Investment’s Ryu Young-ho has already warned that the expected HBM4 delivery ramp-up in the second quarter has not materialized as hoped, raising the possibility of an earnings miss when SK Hynix reports on July 29. Market concentration adds systemic fragility: Samsung and SK Hynix now account for roughly half of the entire Kospi weighting, up from about a quarter at the end of last year, meaning any sharp move in either name drags the benchmark. At the same time, the S&P 500’s semiconductor weighting has ballooned to around 20% — a level that history suggests is difficult to sustain. Some bearish observers are already penciling in a correction for HBM prices after 2026 as competition intensifies and capacity expands.
Compounding the uncertainty is the unusual step taken by SK Group chairman Chey Tae-won. On July 20, he signaled a review of SK Hynix’s bonus model, which currently awards employees 10% of operating profit — a formula that has become contentious as the AI memory boom swells earnings beyond expectations. Chey also anticipates 60–100% growth in AI chip demand in 2026 and has outlined plans to double production capacity within five years and triple it by 2034, backed by a total investment of around 1,100 trillion won. Those ambitions will be tested when the company reveals its second-quarter results, which some market watchers expect to show operating profit of roughly 65 trillion won.
All eyes are now fixed on the July 29 earnings call. Alphabet is already slated to report on July 22, followed by Microsoft, Meta, and Amazon — results that could either reignite the AI trade or deepen the selloff. For SK Hynix, the critical data point will be the HBM4 delivery numbers that accompany the earnings. If they confirm the supply constraints that UBS says could give SK Hynix a 70% share of Nvidia’s upcoming Rubin platform, the recent drop may prove to be a buying opportunity inside a still-intact supercycle. If they disappoint, the 100-day moving average at 1,617,000 won — roughly another 8% lower — will be the next line of defense. Either way, the next ten days will decide whether the July wipeout was a cathartic reset or the beginning of a deeper reassessment.
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