SK Hynix's 660% Profit Jump Can't Stop Foreign Exodus as Labor Dispute and Nvidia's Numbers Take Center Stage

SK Hynix stock soars 158% YTD, but foreign investors sell $17.3T worth. Nvidia earnings and labor dispute add uncertainty as analysts remain bullish.

SK Hynix sits at a peculiar crossroads. The memory giant has just been crowned the best-run non-financial company in South Korea by CEO Score, edging out perennial leader Samsung Electronics. Its stock has surged 158% year-to-date to close at 1,745,000 won, unchanged on Wednesday, and the company's market cap hovers near the trillion-dollar mark at an implied $948 billion. Yet beneath the surface, nerves are fraying: foreign investors have sold shares for ten consecutive sessions, offloading roughly 17.3 trillion won worth of stock, while retail buyers have absorbed nearly the same amount. The selling looks less like a rejection of the AI thesis and more like profit-taking after a dizzying rally, but it underscores how quickly sentiment can shift.

The fundamental story remains explosive. KB Securities projects that SK Hynix will post an operating profit of 70 trillion won in the current second quarter, a 660% leap from a year earlier. That quarterly estimate, if realized, would tower above the company's own full-year record of 45 trillion won in operating profit. The driver is pricing power: KB sees DRAM prices jumping 194% over the course of the year and NAND prices climbing 244%. Those numbers explain why the stock, despite its recent wobble, trades far above its long-term averages.

The immediate catalyst for the next leg — up or down — lands after the US market close on Wednesday, when Nvidia reports earnings. For SK Hynix, Nvidia is not merely a customer but the customer: the Korean supplier provides the high-bandwidth memory (HBM3E and HBM4) that powers Nvidia's current and next-generation GPU platforms. Any comment on AI accelerator demand will flow directly into expectations for the memory cycle. A strong Nvidia outlook could rekindle buying; a miss could extend the foreign exodus.

Adding to the noise is a brewing labor conflict that has little to do with chip production but carries reputational risk. The union representing workers at P&S Logis, a logistics subcontractor, is preparing legal action under South Korea's "Yellow Envelope Act," which since March has expanded the liability of parent companies toward subcontractor unions. The dispute centers on bonus distribution: while SK Hynix's headquarters staff received hefty performance-linked payouts after the record profit, subcontractor employees reportedly got between 5 million and 6 million won. The union aims to end what it calls performance-based discrimination and wants direct negotiations with the mother company. For now, the issue remains a sideshow operationally, but it could intensify the public debate over how the AI supply chain's spoils are shared.

Analysts, for their part, remain bullish. Korea Investment & Securities lifted its price target to 3.8 million won from 2.05 million won, citing structurally stronger memory demand from AI infrastructure. KB Securities pegs fair value at 3 million won, arguing that capacity constraints will keep pricing elevated as new production lines only begin to ramp after 2027. Meanwhile, a planned strike at Samsung Electronics — an 18-day walkout starting Thursday — could inadvertently benefit SK Hynix if clients shift orders to avoid disruption.

To meet unrelenting demand, SK Hynix is laying out ambitious expansion plans. A US initial public offering is slated for the second half of 2026, targeting up to $14 billion to fund new facilities in South Korea and Indiana. On the technology front, the company will deliver initial samples of HBM4E chips in the second half of 2026, with mass production of the next-generation AI processor memory set to begin in 2027. For a stock that has already doubled this year, the question is whether the earnings momentum can outpace the rising tensions — both in the labor force and in the market's reaction to Nvidia's next move.