Why SK Hynix Stock Popped Today
Korean memory chip manufacturer SK Hynix (SKHY +11.26%) stock raced out of the gate Wednesday morning, shooting up 10.5% in the first 10 minutes of trading after exceeding expectations in its Q3 earnings report this morning.
Heading into the report, analysts expected SK Hynix to earn 77.5 trillion South Korean won for the quarter, but the company actually reported an operating profit of 83.3 trillion won — about $62.1 billion — for an operating profit margin of 80%.
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SK Hynix Q3 earnings
Revenue surged ahead 328% year over year to 104.6 trillion won, and on the bottom line, net income was up 216% at 39.8 trillion won — $29.7 billion, a net profit margin of 38%.
SK Hynix makes both NAND flash memory and DRAM, including DRAM high-bandwidth memory (HBM). The company credited sales of cutting-edge HBM4 products for much of its sales and profit margin growth, and predicted that HBM4 sales will, in fact, be its “mainstream product” in Q4 and beyond.
SKHY – SK Hynix
$161.73+$16.37 (+11.26%)
NASDAQ · As of 10:03 AM ET 10/28/26
What’s next for SK Hynix stock
If you think that sounds like good news for SK Hynix and its profits, get ready to be even more impressed. Management advised that it has secured long-term agreements for more than 50% of its expected production in the 2027-2028 time frame, locking in high profit margins for the next two years and mitigating the risk that any overproduction of memory might reverse its growth in profits.
Even absent this move, however, things would be going well for SK Hynix, which says it’s seeing a “virtuous cycle… in which AI-driven productivity gains… lead to greater AI adoption, which in turn drives increased investment in infrastructure,” growing both sales and profits.
Trading at less than 8x earnings today, SK Hynix looks like a long-term AI winner.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.