SK Hynix Shares Surge. Why It's Not Too Late to Buy the Stock.
Key PointsSK Hynix turned in a fabulous Q3 earnings report.
Shares of SK Hynix surged after delivering growth that surpassed analyst expectations. Despite a forward P/E ratio of 4.5 times 2027 estimates and fully sold-out DRAM and HBM volumes through 2029, the stock remains a compelling buy. SK Hynix dominates the HBM market, holding roughly 50% share and supplying Nvidia. Next year's HBM4 price hikes, combined with improved mass production yields, are expected to boost revenue and profits in 2027.
Demand for HBM is over double what SK Hynix can currently provide. The company sees a tiered memory architecture, distributing data across HBM, DRAM, and flash SSDs, as increasingly important due to cost and capacity constraints in HBM and DRAM. More than half of SK Hynix's capacity for 2027 and 2028 is locked in long-term agreements, with 14 signed LTAs.
The company also announced a 20 trillion won ($14.9 billion) share buyback plan and a 14 trillion-won dividend, including gains from Kioxia investments. With memory demand showing no signs of slowing, SK Hynix's position as the HBM leader and its limited competitors give the company a unique advantage.
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