SK Hynix Shatters Profit Records, Yet the Stock Keeps Tumbling — Here’s What Investors Missed
Published on 07/29/2026 at 09:11 | Redaktion boerse-global.de
The numbers coming out of SK Hynix this week are the kind most chipmakers only dream of. Revenue more than tripled. Operating profit surged 557%. Net income exploded by 1,242%. And yet the stock has been in freefall, losing more than half its value from a peak reached just weeks ago.
On Wednesday, the memory-chip giant reported second-quarter revenue of 79.32 trillion won, up 257% from a year earlier. Operating profit hit 60.54 trillion won, translating to a stunning 76% margin — trailing only Micron’s 80.4% among major chip companies and ahead of Nvidia’s 65.6%. Net income soared to 93.92 trillion won, boosted by a one-time book gain of 63.3 trillion won from the sale of its Kioxia stake. For the first half, revenue crossed the 100 trillion won threshold for the first time in company history, reaching 131.9 trillion won.
The headline numbers, however, masked a miss against analyst expectations. According to Reuters, the consensus forecast built on LSEG SmartEstimate had called for revenue of 84 trillion won and operating profit of 64 trillion won — both targets that SK Hynix fell short of. The culprit, according to market participants, was a slower ramp-up in shipments of HBM4 memory chips than investors had hoped for. The company did begin mass shipments of the new HBM4 standard — critical for AI accelerators — during the second quarter, and has signed long-term supply agreements with roughly ten customers, typically spanning five years. But the pace wasn’t fast enough to satisfy the market.
A Market in Meltdown
The disappointment over earnings landed in the middle of a broader rout that has swept through South Korean equities. On Tuesday, the KOSPI index plunged 10.84% to close at 6,023.66 points, triggering the eighth circuit breaker of the year. Samsung Electronics lost 13.39% that same day, while SK Hynix fell 14.65%. Trading was halted again on Wednesday — the second consecutive day — as the VKOSPI volatility index spiked to 80.24 points. President Lee Jae-myung ordered additional market measures, and regulators raised the margin requirement for leveraged positions to 30 million won, effective July 31.
Should investors sell immediately? Or is it worth buying SK Hynix?
The panic wasn’t sparked by anything SK Hynix said. Instead, it was ignited by the stunningly successful IPO of Chinese memory-chip maker ChangXin Memory Technologies (CXMT) and reports that a state-linked Chinese company has already begun producing immersion lithography systems for chip fabrication. Investors fear that CXMT, armed with fresh capital from its listing, will accelerate capacity expansion and narrow the technology gap faster than previously assumed.
Already Negotiating 2027 Contracts
While the market fixates on near-term volatility, SK Hynix is playing a longer game. The company is already in talks with major tech firms to secure supply contracts for High-Bandwidth Memory chips in 2027 — locking in demand years ahead of delivery. Pricing for HBM4, which enters series production in the second half of this year, is being negotiated individually with each customer, taking into account not just standard DRAM pricing and supply conditions but also the investment and opportunity costs of HBM development.
CEO Kwak Noh-Jung told Bloomberg that memory-chip shortages are likely to persist beyond 2030 — a medium-term positive that did little to stem the immediate selling pressure. Analysts expect DRAM prices to rise at least 25% in the third quarter, driven by ongoing HBM supply constraints that could last until 2028.
Wall Street Split on What Comes Next
The analyst community is divided on how to interpret the sell-off. Morgan Stanley, Mirae Asset Securities, and KB Securities have all described the rout as a buying opportunity rather than an exit signal, pointing to price-to-earnings ratios of just two to five for a company posting record profits. Mirae Asset did cut its price target by 33% from 4.2 million won to 2.8 million won, but maintained a buy rating. Analyst Kim Young-gun cited a sector-wide valuation decline in semiconductor stocks while insisting that demand for AI memory chips remains intact, noting Google Cloud’s order backlog has grown to $514 billion.
Others urge caution. Owen Lamont of Acadian Asset Management spoke of "incredible uncertainty" about how AI technology will ultimately affect the economy, warning that no one really knows where the process is heading. He also pointed to leveraged exchange-traded products that could amplify market swings, though he stopped short of blaming them entirely for SK Hynix’s volatility.
SK Hynix at a turning point? This analysis reveals what investors need to know now.
ADRs Hit New Lows
The sell-off has also reached SK Hynix’s freshly listed American Depositary Receipts on the Nasdaq. On Tuesday, the ADRs fell below the psychologically important $130 level, closing at $130.49 — a new record low since the listing earlier this month. The shares are struggling to stay above their issue price.
Technical indicators paint a mixed picture. The relative strength index sits at 34.8, signaling oversold conditions. The stock trades roughly 32% below its 50-day moving average but remains 27% above the 200-day average. Despite the recent carnage, SK Hynix shares are still up 128.88% year-to-date — a reminder of just how extreme the swings have been.
The company holds 88 trillion won in cash and equivalents, with a net cash position of 69.4 trillion won. Capital expenditures for the current year are planned at the upper end of 40 trillion won. For a business generating record profits and sitting on a mountain of cash, the question isn’t whether the fundamentals are sound — it’s whether the market’s fear of Chinese competition has temporarily overwhelmed the math.
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SK Hynix Stock: New Analysis - 29 July
Fresh SK Hynix information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
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