SK Hynix: When a Seven-Decade Profit Blowout Meets a Market That Wants to Bail

SK Hynix posts record operating profit and HBM backlog through 2026, but shares fell 7.66% amid geopolitical tensions and technical overbought signals.

The cognitive dissonance gripping SK Hynix right now is almost comical. The memory-chip powerhouse has effectively sold every HBM module it can make through the end of 2026, analysts are slapping price targets north of 3 million won on the stock, and the second-quarter operating profit is expected to come in at 70 trillion won — a 660% year-on-year surge that would push the operating margin to a staggering 78.1%. And yet on Friday the shares fell 7.66 percent to 1,819,000 won, wiping out a chunk of the week’s earlier gains.

That disconnect is the story of a stock that has already run 168.69 percent in 2025. With a 30-day gain of 60.12 percent and a relative strength index of 68.9, the technical picture was screaming that a breather was overdue. The trigger came from several directions at once.

Geopolitical jitters provided the headline. A fresh spike in tensions in the Strait of Hormuz spooked global risk appetite, while the latest US-China summit wrapped up without any formal agreement on Nvidia chip exports — a direct headwind for the HBM ecosystem SK Hynix dominates. To make matters worse, Samsung Electronics faces an 18-day strike starting May 21, and though that should theoretically tighten supply in SK Hynix’s favor, on Friday it simply accelerated the broad exodus from Korean semiconductor stocks. The KOSPI itself shed 6.12 percent, dragged down by foreign institutional selling.

None of this alters the fundamental picture, which remains extraordinary by any measure. High-bandwidth memory — the ultra-fast chips that power Nvidia’s AI accelerators — is now so scarce that SK Hynix’s chief financial officer has confirmed the entire HBM capacity is booked solid through 2026. Major cloud hyperscalers including Microsoft, Google and Amazon are reportedly exploring direct investments in SK Hynix fab lines to lock in future supply, a dynamic that would transform the company from a mere component vendor into something more akin to a co-invested infrastructure play.

The math behind that pull is stark. In the first quarter, Nvidia alone accounted for 7.78 trillion won of SK Hynix’s revenue — 14.8 percent of the total. An unnamed second large customer added another 12.4 percent, with market chatter pointing to either Microsoft or Google. Macquarie expects HBM prices to rise more than 50 percent in 2027 alone, and the bank recently jacked its SK Hynix price target by 61 percent to 2.9 million won, arguing that the global memory shortage will persist well beyond 2027. KB Securities went even further, lifting its target to 3 million won in mid-May — its eighth upward revision this year — and calling for 194 percent DRAM and 244 percent NAND price increases in 2025.

All of that analyst optimism is built on earnings forecasts that, if realized, would put SK Hynix at the profitability apex of the global chip industry. The 70 trillion won operating profit estimate for Q2, with a 78.1 percent margin, would dwarf most peers. Yet the stock is still roughly 8 percent below the record high of 1,976,000 won it touched on May 13, and the market capitalisation flirted with 950 billion dollars last week before pulling back. The trillion-dollar threshold now functions as a psychological magnet — and a potential zone of resistance.

SK Hynix is pursuing several capital-market moves that could widen the investor base and help fund its ambitious expansion. A US initial public offering via ADR is being prepared for the second half of 2026, with a placement of 2 to 3 percent of the total shares that could raise as much as $14 billion for new fabrication facilities in Yongin, South Korea, and Indiana. Separately, a share buyback programme worth roughly 250 trillion won over two years is reportedly under consideration, though still in the planning stage.

Trading dynamics are about to get more volatile, not less. On May 27, South Korean regulators will list leveraged and inverse single-stock ETFs on SK Hynix, products that amplify daily moves. That extra liquidity could supercharge momentum in either direction, especially with the stock still carrying a stretched valuation that hinges on how long the HBM bottleneck lasts. For now, the only certainty is that every chip coming off the line for the next two and a half years already has a home — and a price that keeps climbing.