Key Takeaways
- SK hynix stock fell 11.9% in the past week (through Monday’s close) after China’s CXMT claimed a denser DRAM design and a Friday scare over AI debt hit chip stocks.
- Elon Musk said a fast Chinese ramp in low-power memory could change things in 2028, but that HBM is a tougher hill to climb.
- SK hynix’s Seoul shares trade at about 3x forward earnings, less than half their five-year average of about 7x, and the US shares sit near 4x 2027 estimates, so the stock already prices in a downturn.
- The third-quarter call on Oct. 28 is the next test, and firm customer commitments for 2027 would back the case for buying.
SK hynix (SKHY) stock fell 11.9% in the past week (through Monday’s close). That’s more than three times the Nasdaq 100’s 3.7% drop. And it came after a 4.7% bounce on Monday alongside Micron (MU) and the other memory stocks.
A China scare and an AI-debt scare hit back to back. In the middle of it, Elon Musk posted a warning that reads better for SK hynix than the sell-off does.
China Lit the Fuse
On Oct. 10, the president of ChangXin Memory Technologies (CXMT) said its denser “4F²” DRAM design would go into server memory by the end of 2026. Nobody has verified the claim yet.
Seoul took it harder. SK hynix closed down 10.09% there on Tuesday, and the Kospi triggered its first sell-side trading curb in nearly two months. The US shares lost 3.2%.
Wednesday was worse: down 6.1%, as hot inflation data lifted bets on another Fed rate hike. Overnight, Korea’s DealSite had reported that some of SK hynix’s HBM4 back-end equipment orders may slip into next year. SK hynix told DealSite its investment is on schedule. The generous reading: SK hynix is reportedly shifting spending toward regular DRAM, where prices are rising. The less generous one is that HBM4 has hit a snag.
Then the AI Debt Scare Hit
Friday did the most damage. SK hynix fell 6.6% on fears that debt-laden AI data center builders can’t earn enough to pay back what they’ve borrowed. The Nasdaq fell 2.14%, chip stocks posted an eighth straight losing day, and Micron lost 5.6%.
CoreWeave (CRWV), the poster child for those worries, sank 12% that day, capping a 25% weekly drop. If AI’s builders can’t finance their data centers, the memory inside them gets harder to sell.
At 12:45 p.m. ET, Elon Musk replied to a Zerohedge post on X:
“For sure in 2027, but if China ramps LP5 & LP6 as fast as they’ve ramped other manufactured products, then 2028 will be a different story. HBM is a tougher hill to climb, however.”
HBM Is the Tougher Hill
So Musk’s warning is about low-power DRAM, and about 2028. CXMT’s own plan fits it: its first 4F² product is standard server memory.
That matters, since SK hynix’s margins depend on tight supply. Its gross margin went from under 1% in the September 2023 quarter to 79% in the March 2026 quarter. Second-quarter revenue jumped 257% to KRW 79.3 trillion, with a 76% operating margin, and management expects supply to stay tight for a long time.
The 2023 low is the warning: when supply loosens, memory margins can collapse fast.
Priced for a Downturn
SK hynix sits 28.5% below its 52-week high. Its Seoul shares trade at 3.12x forward normalized earnings, barely above their 2026 low of 3.10x and less than half their five-year average of 6.94x (an average distorted by the 2022–2023 memory downturn, when forward earnings turned negative). On the US shares, Monday’s $142.87 close works out to about 4.1x the 2027 EPS estimate below.
Analysts still expect normalized EPS to climb from $26.68 in fiscal 2026 to $34.48 in 2027 and $44.63 in 2028.
Musk was talking about Chinese supply, not SK hynix’s earnings. But if his 2028 warning plays out, that year’s estimate is the most exposed, and only three analysts make it.
Analysts’ mean price target was still $252 midweek, about 76% above Monday’s close.
Oct. 28 Is the Real Test
SK hynix holds its third-quarter call at 9 a.m. Seoul time on Oct. 28 (8 p.m. ET on Oct. 27). Listen for firm customer commitments for 2027, and for any word on the HBM4 equipment report.
My take: at 3x to 4x forward earnings, SK hynix looks like a buy. The price already assumes the boom ends, and Musk sees HBM, where SK hynix leads, as China’s tougher hill.
Of course, if memory prices roll over, those earnings shrink, and neither multiple will look cheap anymore.
So what is SK hynix stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
