TLDR
- SKHY stock fell ~5% in Nasdaq premarket Tuesday, extending Monday’s 7.47% decline
- The stock has dropped nearly 47% from its June peak, erasing ~$600 billion in market value
- Fears center on Chinese chip competition, crowded AI positioning, and hyperscaler spending doubts
- Q2 earnings are due Wednesday July 29; analysts expect revenue up 278.6% year-over-year
- Barclays has a Buy rating with a $330 price target, implying 130% upside from current levels
SK Hynix (SKHY) stock was down 4.80% at $136.17 in premarket trading on Tuesday, July 28, adding to Monday’s 7.47% drop as investors continued to pull back from AI-linked semiconductor names ahead of Wednesday’s Q2 earnings report.
The two-day slide has been sharp. SKHY has now fallen nearly 47% from its June peak, wiping out close to $600 billion in market value in just over a month.
The sell-off is not isolated to SK Hynix. Micron Technology (MU) dropped more than 4% in premarket Tuesday. Nasdaq futures fell around 0.7%, and S&P 500 futures also edged lower, reflecting a broader risk-off mood in tech.
Samsung (SSNLF) fell more than 13% in South Korea as the Wall Street-led sell-off in AI stocks rippled through Asian markets. SK Hynix itself dropped over 14% on the Korean exchange before the premarket U.S. moves.
What’s Driving the Weakness
Two main fears are driving the sell-off. First, investors are worried that AI infrastructure spending by hyperscalers could slow. Second, Chinese memory chip maker CXMT had a strong stock market debut in Shanghai, raising concerns about new memory supply entering the market and pushing chip prices lower.
Reports of Chinese progress in deep-ultraviolet lithography machines added fuel to the fire, stoking fears that domestic Chinese chip production could accelerate faster than expected.
Pictet Asset Management’s Andy Wong said the market is debating whether memory makers like SK Hynix are capturing too much of the AI supply-chain economics. He said investors want to see whether the perception that SK Hynix is extracting excessive margin from customers changes.
Must Asset Management’s Kim Minji said earnings alone may not be the catalyst the market is looking for. She said investors will pay close attention to whether SK Hynix lifts shareholder returns through buybacks, and whether hyperscalers continue raising capital expenditure.
What Analysts Expect Wednesday
Wall Street is expecting a strong Q2 report. Consensus estimates point to revenue of ₩84.17 trillion ($57.7 billion), up 278.6% from a year ago. Operating profit is forecast at ₩64.24 trillion, nearly seven times higher than last year.
That growth is underpinned by robust demand for high-bandwidth memory (HBM) chips used in AI systems, along with higher DRAM and NAND prices.
Barclays analyst Simon Coles initiated coverage of SKHY earlier this month with a Buy rating and a $330 price target. That implies roughly 130% upside from current levels. Coles expects demand to outpace supply through 2027, which he says should keep memory chip prices firm.
NH Investment & Securities’ Shawn Oh called SKHY a compelling buy at current valuations, pointing to deleveraging by Korean retail investors as a technical factor. He noted some investors are trimming exposure ahead of broader U.S. tech earnings, not because of SK Hynix fundamentals.
The stock’s consensus rating on Wall Street is Moderate Buy, with the average price target also at $330.
SK Hynix listed its ADRs on Nasdaq on July 10, raising $26.5 billion. Despite the recent sell-off, the stock in South Korea is still up approximately 130% over the longer term.
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