SK Hynix’s Profit Jumped 632% as AI Eats the World’s Memory
SK hynix just posted the kind of numbers that make investors question everything they thought they knew about commodity chip stocks, but the real story lives in what the CEO said about demand through 2029 and why net income badly…
A single quarter at SK hynix (NASDAQ:SKHY) brought in more revenue than the company booked in the prior year. Results released on October 28, 2026, Seoul time, showed revenue of 104.6155 trillion won, about $78 billion. SK hynix’s prior full year produced 97.1467 trillion won.
Operating profit rose 632.1% from a year earlier to 83.3338 trillion won, about $62 billion. That works out to a 79.7% operating margin on a commodity product. SK hynix ADS closed at $145.36 on October 27, up 1.92%, then rose 2.80% to $149.43 after hours.
By 11:20 a.m. Wednesday in Seoul, SK hynix was up 7.76%, and the Kospi was up 5.8%. Earlier, the Kospi’s buy-side sidecar, a circuit breaker, had paused program buying for five minutes. This followed SKHY’s 24.12% monthly drop before the report.
What SK hynix Reported, What It Signed and What It Only Intends
Operating profit beat consensus by 9.3%. It was the sixth straight quarter of record revenue and record operating profit. Net income came in at 39.7756 trillion won, up 215.7%, but that was well short of estimates.
The shortfall came from 32.6 trillion won of non-operating expenses. Those included an 11.6 trillion won currency loss from a weaker won and 22.9 trillion won of losses on the value of investment holdings. Both charges sat outside the chip business, and the currency loss shows the risk ADS (the U.S.-traded shares) holders carry.
CEO Kwak Noh-Jung said, “Our DRAM and HBM volume for the next three years through 2029 are effectively sold out.” That line was interpreted into English on the call, and it includes long-term agreements (LTAs) plus demand still under discussion, while the signed portion is smaller. CFO Kim Woo-hyun said the company has signed LTAs with 14 key customers, mostly on five-year terms, and those contracts cover more than 50% of capacity for 2027 and 2028.
The planned 2026 shareholder return of about 100 trillion won includes the 40 trillion won buyback announced in August, which is already finished. Of the new 20 trillion won buyback, only 10 trillion won will be used to retire shares. The other half will fund employee pay.
What the Quarter Means for SKHY and Micron Holders
Price, more than volume, explains why profit grew faster than revenue. In the second quarter, DRAM bit shipments grew about 10% while DRAM prices rose about 20%. Per SK hynix, NAND prices rose about 20% as bit shipments dipped.
Micron Technology (NASDAQ:MU | MU Price Prediction) closed at $928.76, up 2.77%, and added 1.38% after hours. Its fiscal fourth quarter produced $54.23 billion in revenue at an 87.0% non-GAAP gross margin. For Micron, the SK hynix report confirms the pricing it has already reported.
Reality Check: A Boom Driven by Price
Kim said, “We expect CapEx in 2027 to increase significantly compared to 2026.” In the past, memory booms ended when every manufacturer added capacity at the same time.
He forecast that “shipment volumes for PCs and mobile devices are expected to decrease” because memory costs are rising, which leaves growth to a small group of cloud buyers. Kim Woo-hyun expects 2027 demand to grow by mid-20% for DRAM and by a high-teen percent for NAND. Both forecasts assume AI spending holds up.
What SKHY’s Valuation Signals Before 2027 Spending Rises
Kim said the share price is “undervalued, not adequately reflecting our earnings and cash flow.” Management has a reason to say that. Still, a forward earnings multiple of about 4 and 98.7 trillion won of net cash back him up.
Because signed contracts cover more than half of capacity for 2027 and 2028, the downturn priced in by the 24.12% decline is unlikely to come before the new spending does.
Micron trades at a forward multiple of about 5. For investors researching dollar-based results with no currency exposure, it offers a simpler comparison.
A close above the 50-day moving average of $169.39 would support the contract-backed case. A drop below the 52-week low of $124.78 would mean the market is pricing in a bust driven by capital spending.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
