SK Hynix Wins Fresh Buy Case as AI Memory Demand Outruns the Price Cycle

DS Investment & Securities reaffirmed its buy rating on SK Hynix on Thursday, keeping a price target of 2.64 million won and arguing that demand for AI servers and high-performance memory will cushion the company through an eventual downturn in chip prices.

The bullish call rests on a simple proposition: even as the memory price cycle turns, SK Hynix's earnings power should hold up well enough to justify current valuations. For the fourth quarter of 2026, the brokerage projects revenue of 128.3 trillion won and operating profit of 102.1 trillion won, each up 23% from the prior quarter. HBM memory, server DRAM, AI server demand and emerging HBM4 sales are all named as drivers.

The longer-range numbers are bolder still. DS Investment sees operating profit of 443.8 trillion won in 2027, a 56% year-on-year increase, on an operating margin of 79%. That forecast effectively ties the investment case to continued earnings momentum, with sophisticated memory products expected to deliver the results — and a weaker pricing trajectory the main risk to the outlook.

A Peak, Then a Slide — but Profitable Nonetheless

The analysts do not pretend the good times last forever. They model a decline in memory prices from 2028, forecasting operating profit of 330.7 trillion won that year and 290.3 trillion won in 2029 — roughly 65% of the 2027 level. The buy rating therefore comes attached to an earnings peak followed by a gradual fade, and depends on SK Hynix staying profitable enough after the price adjustment to support a positive valuation.

Capital spending by US cloud providers is expected to slow sharply, from 53% growth in 2027 to possibly 14% in 2028, according to the brokerage. Even so, it forecasts worldwide AI server shipments rising 30% in 2028. That combination — resilient server demand against fading investment momentum — is the key condition behind the optimistic view.

Domestic Buyers Step In as Foreigners Head for the Exit

The stock rose 7.2% on the day, helped by a recovery in US chip shares and easing fears that AI investment budgets could be cut. Earlier in the session, concerns about tighter rules for US data centres had weighed on sentiment; analysts expect such rules to delay projects rather than necessarily shrink their overall size, a view that helps SK Hynix provided deferred projects are eventually built and memory demand is preserved.

Institutional investors were the buyers, absorbing a seventh consecutive session of net selling by foreign investors, according to media reports — a countermove that is not yet regarded as a confirmed turnaround. The stock was up 0.7% at the time of that report.

Capacity Locked Up, Solidigm Listing Shelved

On the operational front, SK Hynix said on 28 October that long-term agreements cover more than 50% of its production capacity for 2027–2028, and it believes memory supply tightness could persist until 2030. Preliminary third-quarter 2026 figures showed revenue of 105 trillion won, operating profit of 83.3 trillion won and net profit of 39.8 trillion won. The company also disclosed that it had halted a review of a Solidigm initial public offering.

IBK Investment & Securities cut its price target on 29 October to 3.2 million won from 4 million won, while keeping its buy recommendation.

Washington Paperwork Stalls the US Blueprint

Reuters reported about a week ago that US authorities had not granted the requested export licences for American chipmaking equipment destined for SK Hynix's plant in Dalian, China. That complicated Solidigm's proposed NAND fab plans in New York State. Solidigm said it is reviewing possible factory sites worldwide and has made no decision on a specific route.

SK Hynix is also preparing to expand its US workforce and reorganise its American operations around 3 December, according to media reports, in a push to deepen cooperation with key customers including Nvidia.