Disclaimer: This article is for informational purposes only and does not constitute financial advice.
Investment Thesis and Target Price
Eugene Investment & Securities maintains a Strong Buy investment rating for SK Hynix with a Target Price of 3,700,000 KRW (~$2,587 USD based on 1430 KRW/USD). Despite recent stock price weakness, the brokerage views the current correction as a result of temporary uncertainties regarding shareholder returns and Long-Term Agreements (LTA) rather than fundamental issues. The analyst expects additional shareholder returns to be implemented likely in 4Q26 and emphasizes that AI infrastructure investment is evolving into national-level competition, which limits the possibility of a demand slowdown.
Earnings Estimates and Financial Preview
For 2Q26, SK Hynix reported revenue of 79.3 trillion KRW (~$55.4B USD, +51% QoQ) and operating profit of 60.5 trillion KRW (~$42.3B USD, +61% QoQ). While operating profit slightly missed the firm’s estimate of 61.4 trillion KRW (~$42.9B USD) due to lower-than-expected general DRAM price increases and the late-quarter start of HBM4 shipments, the operating margin expanded to 76%. For 3Q26, operating profit is projected to reach 78.0 trillion KRW (~$54.5B USD, +29% QoQ). Looking ahead, the 2026E annual operating profit is estimated at 262.1 trillion KRW (~$183.3B USD) and 2027E at 447.8 trillion KRW (~$313.2B USD).
Key Semiconductor Drivers and Outlook
The outlook remains positive driven by robust pricing power in the server market. DRAM spot prices are hitting new record highs, and competition to secure memory remains intense. Key catalysts include the expanded shipment of High Bandwidth Memory (HBM)—specifically HBM4—and 1cnm-based SOCAMM2 in the second half of the year. While NAND Flash may show relative weakness compared to DRAM, the eSSD market remains strong. Furthermore, the brokerage highlights a potential new demand axis: direct memory procurement by frontier AI Labs (e.g., OpenAI, Anthropic), which would intensify competition for HBM, server DRAM, and eSSD.
🔗 Original Source: View the official filing/article here.