SK Hynix’s Double Act: A Record Quarter, a $500 Billion Nvidia Deal, and a Market Still on Edge

SK Hynix shares swing wildly after record Q2 results and a $500 billion Nvidia partnership, as market euphoria and panic collide amid a 50% monthly rout.

The whipsaw in SK Hynix shares over the past 48 hours tells a story of a market caught between euphoria and panic. After reporting the strongest quarterly results in its history, the South Korean chipmaker saw its stock plunge, then recover, then slide again — a pattern that has left even seasoned investors dizzy.

On Thursday, the stock closed at 1,322,000 won in Seoul, down 5.64% for the session. That marked the third consecutive day of losses, extending a month-long rout that has wiped more than half the company’s market value since its June peak. Over the past 30 days, the shares have tumbled 50.11%.

Yet just hours earlier, the narrative had flipped dramatically. After releasing second-quarter numbers late Wednesday, SK Hynix initially saw its stock crater more than 9% in after-hours trading. Then, within minutes, the mood shifted. The shares reversed course to close the extended session up over 2%.

The catalyst was an earnings call that changed everything.

Management Fires Back at Skeptics

SK Hynix’s management used the call to deliver a forceful rebuttal to growing doubts about the longevity of the AI investment cycle. The company confirmed it would set capital expenditure for 2026 at the top end of its 40 trillion to 50 trillion won target range — a clear signal that it plans to accelerate, not slow, spending on high-bandwidth memory and other AI-related products.

But the headline-grabbing announcement came next. SK Group and Nvidia have signed a sweeping partnership agreement valued at more than $500 billion, covering the construction of AI factories and the supply of next-generation memory chips. For SK Hynix, the deal provides a long-term offtake guarantee for its most advanced products. For Nvidia, it locks in a stable supply of the memory chips essential to its AI accelerators.

The news was enough to drag the broader market along for the ride. South Korea’s Kospi index jumped as much as 2.76%, while Japan’s Nikkei 225 climbed back above 63,000 points. Samsung Electronics, the country’s other memory-chip giant, rallied in sympathy.

The Numbers That Weren’t Enough

The financial results that preceded the drama were, by any measure, extraordinary. SK Hynix reported second-quarter revenue of 79.32 trillion won ($55.1 billion), up 257% year over year. Operating profit surged 557% to 60.54 trillion won ($42.1 billion). Both figures were all-time records.

But the market had priced in even more. Analysts had expected revenue of roughly 83.9 trillion won and operating profit of 64.2 trillion won. The miss — however modest in absolute terms — triggered an initial sell-off that exposed the fragility of investor sentiment after weeks of brutal declines.

Kim Young-gun of Mirae Asset Securities called the recent correction “excessive” relative to the company’s fundamentals, though his firm still lowered its price target, citing lower sector valuations and elevated market volatility.

The Leverage Factor

The scale of the rout has drawn scrutiny from policymakers in Seoul. Much of the blame is being directed at leveraged single-stock ETFs, which launched in late May on Samsung Electronics and SK Hynix. These products promise twice the daily return of the underlying stock — in both directions.

When the tide turned, the leverage worked in reverse. The Kospi has triggered multiple circuit breakers over the past two months as violent swings in the chip sector cascaded through the broader market. On Wednesday, South Korea’s parliament summoned senior financial regulators to publicly question the products and the role they may have played in amplifying the sell-off.

Kim Kyeong-joon, a former vice chairman of Deloitte Consulting Korea, argued that the rally had been overdone even before the ETFs launched, but that the leveraged products accelerated the downturn once sentiment soured. Still, he cautioned against an outright ban, warning it would create more chaos than the current situation.

A Fat-Finger Ripple

The volatility even spilled into crypto markets. On Tuesday, a single trade at a clearly erroneous price triggered a 30% intraday plunge in SK Hynix shares during pre-market trading in Seoul. While subsequent trades corrected the price, the damage was already done for a group of traders outside regulated exchanges. Crypto speculators who had placed leveraged bets on the stock’s direction suffered heavy losses.

Where the Stock Stands Now

At current levels, SK Hynix trades about 52% below its 52-week high of 2,987,000 won, set on June 25. The 14-day relative strength index sits at 31.8, signaling oversold conditions. But the annualized 30-day volatility of over 121% suggests the turbulence is far from over.

The stock’s distance from its 200-day moving average — plus 21.75% — underscores just how quickly positioning has shifted. From one of the hottest AI trades in the world to a portfolio headache in the span of a month, SK Hynix has lost nearly $600 billion in market capitalization since its peak.

The $500 billion Nvidia partnership and the commitment to top-end capital spending represent management’s most aggressive effort yet to counter the narrative that AI demand has peaked. For now, investors appear willing to give the company the benefit of the doubt — but the whipsaw action suggests trust remains fragile.