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SK hynix: Record Earnings, Structural AI Growth and Undervalued Shares

  • I am rating SK hynix a Strong Buy because it is the leading beneficiary of the AI memory boom, with dominant positioning in HBM, server DRAM and enterprise SSDs that are becoming increasingly critical to AI infrastructure deployments.


  • The company is delivering exceptional financial performance, reporting record 2Q FY 2026 revenue of USD 54.2 Bn, operating profit of USD 41.4 Bn and a 76% operating margin, driven by strong pricing and growing demand for AI-focused memory products.


  • AI-related memory demand appears increasingly structural rather than cyclical, supported by rising investments from hyperscalers, expanding AI adoption across industries and long-term supply agreements with approximately ten key customers that improve revenue visibility.


  • Despite industry-leading growth and profitability, SK hynix trades at a substantial valuation discount to major AI semiconductor peers, including Micron and AMD, creating the potential for both continued earnings growth and future valuation multiple expansion.

Four SK hynix memory chips on a red grid surface, one upright showing text and three laid flat with green contact patterns.
Source: SK Hynix

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