SK Hynix Crosses a Valuation Rubicon as Clients Turn Co-Investors in a Sold-Out Market

SK Hynix's forward P/E surpasses Samsung's for the first time, driven by a severe memory shortage and HBM dominance. Stock volatility persists as analysts raise targets to 3 million won.

SK Hynix this week achieved something no one in the Korean chip industry had ever seen — its forward price-to-earnings ratio pulled ahead of Samsung Electronics for the first time. The milestone arrived on Thursday when the stock struck an all-time high of 1,976,000 won, only to be followed by a 7.66% slide on Friday that closed the week at 1,819,000 won. The whiplash reflects a market caught between earnings forecasts that look almost surreal and a sudden bout of risk aversion tied to geopolitical tremors in the Strait of Hormuz and a walkout at its biggest rival.

A New Valuation Order

The 2026 forward P/E for SK Hynix stood at 6.79 as of Thursday, edging past Samsung’s 6.77, according to FnGuide. Three months ago the gap was 2.8 points in Samsung’s favour. “The disappearance of Samsung’s valuation premium means, from the other side, that the re-rating of SK Hynix is complete,” one local broker noted. The stock is now up roughly 169% year-to-date, with a relative strength index near 69 and a price more than 56% above its 50-day moving average — technical indicators that scream overbought even as fundamental analysts keep raising their sights.

Every Chip Spoken For

The engine behind the rerating is a memory shortage that Goldman Sachs calls the worst in 15 years, pegging the DRAM supply gap at 4.9%. SK Hynix has publicly declared that its DRAM, NAND and HBM production is fully sold out — not all customer orders can be fulfilled. On the HBM front, the company controls roughly 54% of the global market and has locked in about 70% of orders for HBM4, the memory destined for Nvidia’s upcoming Vera Rubin platform. Its HBM4 yield has already reached 80%, while Samsung’s remains stuck below 60%.

So tight is the capacity that Microsoft, Google and Amazon are reportedly preparing to make investment proposals to SK Hynix in exchange for guaranteed allocations over the coming years. Chipmakers traditionally fund their own expansion; such direct co-investment from cloud giants is virtually unknown in the industry. Analysts at Macquarie also point to a possible ADR listing in the United States and a share buyback programme of roughly 250 trillion won over two years as moves that could broaden the investor base and further tighten the equity float.

Analysts Go All In

The earnings trajectory is staggering. KB Securities, which has raised its target on SK Hynix eight times this year, now sets a price objective of 3 million won — up from 2.8 million won in mid-May. The bank expects full-year DRAM and NAND price increases of 194% and 244% respectively. Macquarie followed with a 61% lift to 2.9 million won, forecasting that the global memory shortage will persist well beyond 2027 and that HBM alone will see price increases of more than 50% in that year.

For the second quarter, KB Securities models an operating profit of 70 trillion won — a 660.4% surge from a year earlier — with an operating margin of 78.1%. That would put SK Hynix at the top of the global chip industry on profitability. UBS earlier raised its earnings-per-share estimates for 2026 and 2027 by 22% and 29%, lifting its price target to 1.7 million won and describing the cycle as a memory supercycle not seen in nearly three decades.

The Other Side of the Wafer

Samsung, however, is not standing still. Reports indicate it has passed final HBM4 qualification tests with Nvidia and AMD and intends to begin full-scale supply from June. If mass production of HBM4 ramps up in the second half of 2026, SK Hynix’s market share could slip to between 50% and 60%, putting pressure on its newfound valuation lead. Moreover, Samsung faces a strike starting 21 May that is scheduled to last 18 days. JPMorgan estimates that wage increases could weigh on Samsung’s operating profit by 7% to 12% — a temporary tailwind for SK Hynix, but one that cuts both ways if labour unrest spreads.

Geopolitical cross-currents also flared on Friday. A US-China summit ended without a formal agreement on Nvidia chip exports, raising the spectre of further restrictions that could ripple through the HBM supply chain. The KOSPI fell 6.12% on Friday after briefly touching the 8,000-point mark, with technology stocks leading the retreat. SK Hynix still ended the week in positive territory, but the volatility has investors bracing for more.

A New Technical Frontier

On 27 May, South Korea’s financial regulator plans to list 2x leveraged products linked to SK Hynix, which could amplify both trading volumes and daily swings. That puts a $1 trillion market capitalisation — the stock’s implied valuation at the recent peak — within reach as a psychological milestone. For now, the company’s pricing power in HBM remains intact as long as Goldman Sachs’ forecast of undersupply lasting until at least the first half of 2027 holds true. The symbolic victory over Samsung in valuation terms may soon be followed by more tangible ones.