Disclaimer: This article is for informational purposes only and does not constitute financial advice.
Investment Thesis and Target Price
DS Investment & Securities maintains a Buy investment rating and a Target Price of 3,100,000 KRW (~$2,157 USD based on 1437 KRW/USD) for SK Hynix. Despite recent market skepticism regarding AI infrastructure investment, the brokerage believes the semiconductor cycle is far from over, projecting quarterly operating profit growth to continue through the fourth quarter of 2027. The valuation is supported by the absence of oversupply signals and the potential for the stock to attempt new all-time highs by the first half of 2027, following historical upcycle patterns.
Earnings Estimates and Financial Preview
For 2Q26, SK Hynix recorded revenue of 79.3 trillion KRW (~$55.1B USD), up 51% QoQ, and an operating profit of 60.3 trillion KRW (~$41.9B USD), up 60% QoQ. The operating profit margin (OPM) reached 76%, exceeding the brokerage’s estimate of 75%. For 3Q26, the operating profit estimate has been revised upward to 78 trillion KRW (~$54.3B USD), representing a 29% QoQ increase with an OPM of 79%. Long-term forecasts project 2026 operating profit at 267 trillion KRW (~$185.8B USD, +467% YoY) and 2027 operating profit at 415 trillion KRW (~$288.7B USD, +55% YoY).
Key Semiconductor Drivers and Outlook
The strong 2Q26 results were driven by significant ASP increases in DRAM (+30% QoQ) and NAND Flash (+57% QoQ), with high OPMs in DRAM (81%) and NAND (65%) attributed to increased sales of server-oriented LPDDR products, including SOCAMM2. Looking ahead, the brokerage expects ASPs to remain robust in the second half of the year as the company increases the production proportion of general-purpose DRAM. Technological catalysts include the mass production of HBM4 starting in 2Q26 and the goal for full-scale mass production of HBM4E by 2027. Additionally, the company is focusing on optimizing its storage portfolio (SLC, TLC, QLC) to meet specific customer workloads as AI inference expands.
🔗 Original Source: View the official filing/article here.