SK Hynix’s Record Quarter Fails to Halt a 53% Slide From Its Peak
Published on 07/29/2026 at 19:31 | Redaktion boerse-global.de
The numbers are stunning by any measure. SK Hynix just posted the highest quarterly profit in its history, with revenue surging 257% year-on-year and operating income leaping 557%. Yet the market’s response was brutal: shares of the South Korean chipmaker tumbled 9.61% on Wednesday to close at 1,401,000 won, pushing the stock 53.10% below the all-time high of 2,987,000 won it touched on June 25.
The disconnect between corporate performance and market reaction comes down to a single word: expectations. Analysts surveyed by LSEG had penciled in operating profit of around 64 trillion won for the second quarter, but SK Hynix delivered 60.54 trillion won. Revenue of 79.32 trillion won also missed the consensus estimate of 84 trillion won. The company attributed the shortfall to a shift in its earnings mix and timing effects tied to revenue recognition for its new HBM4 memory, which only began mass production during the quarter.
A One-Off Windfall Masks the Core Miss
Net income told a different story, soaring to 93.92 trillion won — a figure that actually exceeded the quarter’s total revenue. That eye-popping result was fueled by a one-time gain of roughly 62 trillion won from the partial sale of SK Hynix’s indirect stake in Japanese flash memory maker Kioxia, coupled with a revaluation of the remaining holdings. Kioxia has appreciated significantly since its December 2024 IPO, riding the same AI infrastructure wave that has lifted SK Hynix.
Investors, however, focused on the operating business rather than the accounting windfall. The core miss on operating profit and revenue overshadowed what would otherwise have been a celebratory earnings release.
Should investors sell immediately? Or is it worth buying SK Hynix?
A Regulatory Squeeze and a Market-Wide Rout
Wednesday’s sell-off did not happen in isolation. South Korea’s benchmark Kospi index cratered 5.98% to 5,663.24 points, triggering a trading halt. Since its June 19 peak, the index has lost roughly 39.7%, with July alone accounting for a 31.8% decline — a monthly drop that surpasses even the worst moments of the late-1990s Asian financial crisis. Samsung Electronics, SK Hynix’s domestic rival, fell more than 5% on the day.
A regulatory deadline added fuel to the fire. Starting July 31, South Korea’s Financial Services Commission will enforce stricter rules on leveraged single-stock ETFs, tripling the minimum deposit requirement from 10 million won to 30 million won and no longer accepting stocks or other ETFs as substitute collateral. The measure, announced on July 16, triggered a wave of margin calls and forced deleveraging that disproportionately hit liquid, high-beta chip stocks like SK Hynix.
China’s CXMT Debut Fans Competitive Fears
Adding to the anxiety, Chinese memory maker CXMT made its Shanghai stock exchange debut on Monday, with shares surging 466% on the first day. The IPO raised roughly $9.8 billion, according to reports, and stoked investor concerns that cheaper Chinese alternatives could eventually pressure margins at the established trio of SK Hynix, Samsung, and Micron.
Analysts caution that the technological gap remains wide. CXMT currently produces conventional DRAM chips such as DDR4 and DDR5, while SK Hynix dominates the high-margin HBM segment critical for AI accelerators. Industry estimates suggest CXMT trails by roughly three years in HBM technology, and its IPO prospectus contained no concrete investment plans for that area. Still, the mere prospect of future competition was enough to rattle already nervous markets.
Analysts Split as Management Doubles Down
The analyst community is divided on where SK Hynix goes from here. DS Investment & Securities maintains a bullish target of 3.1 million won, signaling confidence in the long-term HBM narrative. BNK Investment Securities, by contrast, slashed its target to 1.48 million won, while Mirae Asset cut its estimate from 4.2 million to 2.8 million won. Concerns center on the sustainability of AI-related capital spending by major cloud providers, potential overcapacity, and the lack of concrete shareholder return plans — though the company’s finance team says it is reviewing additional payout options.
SK Hynix at a turning point? This analysis reveals what investors need to know now.
SK Hynix’s management pushed back against any notion that AI demand is fading. In the earnings conference call, the company announced it would boost capital expenditure to the high-40-trillion-won range this year, a record level and a significant jump from last year’s roughly 30.2 trillion won. The focus remains on expanding advanced packaging capacity for HBM4, which entered mass production in the second quarter. Samples of the next-generation HBM4E have already been delivered to customers, with volume production slated for 2027. To lock in demand, SK Hynix has signed around ten long-term supply agreements spanning three to five years, some backed by customer prepayments.
Technical Signals and the Quarter Ahead
The 14-day relative strength index has fallen to 33.2, a level that typically indicates an oversold condition. The 30-day annualized volatility stands at a staggering 123.55%. For the third quarter, SK Hynix guided for DRAM shipments to rise roughly 10% sequentially, while NAND shipments are expected to post only low single-digit growth.
Whether the current sell-off proves to be a regulatory-driven technical correction or the beginning of a deeper reassessment of HBM4 revenue timing remains the open question. For now, the stock presents a picture that is technically oversold but fundamentally still growing — a tension that will likely define its trajectory in the weeks ahead.
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