SK Hynix Nears Record Highs on 72% Margins and Broader AI Demand — But Caution Lurks in the Rally's Heat

SK Hynix surges 186% in 2024 on AI memory demand, posts record margins; diversifies beyond Nvidia with new hyperscaler client; analysts target 3M won but caution on rapid rally.

Few stocks have ridden the artificial intelligence wave as decisively as SK Hynix. The South Korean memory-chip giant has surged 186.71% since the start of the year, closing on Friday at 1,941,000 won — just 1.77% below its 52-week peak of 1,976,000 won. Yet for all the euphoria, a subtle tension hangs over the stock: the market is pricing in a structural transformation, but the rally’s velocity has investors questioning how much is already baked in.

The fundamental case has rarely been stronger. SK Hynix’s first-quarter results, released in late April, showed operating profit of 37.6103 trillion won on revenue of 52.5763 trillion won, yielding an operating margin of 72% and a net margin of 77%. Net profit reached 40.3459 trillion won. The balance sheet has also hardened: cash and equivalents rose to 54.3 trillion won while financial debt shrank to 19.3 trillion won, leaving net liquidity of 35 trillion won. Management is channelling that firepower into expanding production capacity, including the ramp-up of the M15X fab, preparations for the Yongin cluster, and investments in EUV lithography equipment.

Customer Base Widens Beyond Nvidia

Nvidia remained the largest customer in the first quarter, accounting for 14.8% of SK Hynix’s revenue, or roughly 7.78 trillion won. But the more telling development was the emergence of a second big buyer — an unnamed North American hyperscaler that contributed 12.4% of sales. That marks the first time a customer other than Nvidia has crossed the 10% threshold, suggesting that demand for high-bandwidth memory (HBM) and premium DRAM is broadening as cloud giants roll out their own custom AI chips. Wedbush analyst Daniel Ives recently added SK Hynix to his “AI 30” list, calling it a core beneficiary of what he describes as an unprecedented memory supercycle. The firm also believes a potential U.S. listing of depositary receipts later this year could raise between $10 billion and $14 billion, further lifting the stock’s profile among international investors.

Analyst Targets Keep Climbing — and the Bar Is High

SK Securities has raised its price target to 3,000,000 won, a level echoed by KB Securities, which argues that SK Hynix could become only the second South Korean company to reach a $1 trillion market capitalisation. KB’s forecast implies an operating margin of 78.1% for 2026 — an extraordinary figure even by semiconductor standards. Mirae Asset Securities has lifted its target from 2,000,000 won to 2,700,000 won, reflecting the sector’s re-rating as memory plays are increasingly bundled into the AI complex. The logic is straightforward: without HBM and high-capacity server DRAM, large-scale AI data centres cannot scale. That dependence is seen as structural, not cyclical.

Yet the bullish thesis comes with a caveat. The stock gained 58.71% in the past month alone, pushing its 14-day relative strength index to 68.9 — elevated but not yet overbought. Annualised volatility over the last 30 days stands at 75.52%, a sign that the trend is intact but the ride is becoming rougher. On the chart, resistance sits near 1,970,000 won, while a support floor exists at 1,880,000 won. A break above the former could put fresh all-time highs within reach; a slip below the latter might invite a bout of profit-taking.

Short-Term Catalysts and Dividends

The coming days bring two events that could sharpen trading activity. On 27 May, the Korea Exchange will list 18 new leveraged and inverse single-stock products tied to SK Hynix and Samsung Electronics, a move that tends to amplify volume around both heavyweights. The following day, 28 May, is the ex-dividend date for SK Hynix’s quarterly payout of 375 won per share, which is scheduled to be paid on 30 June. With the yield modest relative to the stock’s rally, the dividend is unlikely to be the main attraction — instead, all eyes will be on whether the AI demand pipeline can sustain the margin and price targets that have pushed the equity to the brink of a record.