Is SK Hynix (HXSCL) Positioned for Multi-Year Upside in the AI Memory Cycle?

SK hynix Inc. (OTC:HXSCL) is among the most fantastic stocks every investor should pay attention to. SK Hynix is the top performer in our list with YTD gains of around 260%. On October 31, Goldman Sachs upgraded the company’s rating to Buy from Neutral and raised the price target from KRW 300,000 to KRW 700,000. The analyst expects the company to be a beneficiary of “one of the strongest memory upcycles” through 2026.

Is SK Hynix (HXSCL) Positioned for Multi-Year Upside in the AI Memory Cycle?

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Goldman expects the company to “meaningfully outgrow consensus expectations” with a 50% year-over-year growth in its High Bandwidth Memory (HBM) shipments. They also estimate that the server memory supply-demand dynamic will remain highly favorable for the company as large investments in AI infrastructure continue. According to their analysis, the majority of growth in next year’s DRAM supply will be consumed by server-related demand.

The investment bank also believes that emerging demand from the next-generation computing architecture, SOCAMM, will potentially account for 5% of global DRAM demand in 2026 and rise to 9% by 2027.

Goldman Sachs argues that “substantial upside remains” for earnings due to the accelerating AI memory cycle, despite street estimates for SK Hynix having already moved higher since September.

Separately, in a November 4 interview, Simon Woo, Director of Korea Research at Bank of America (BofA), observed that, unlike in previous cycles, when profits were largely cyclical, companies such as SK hynix Inc. (OTC:HXSCL) are now securing more stable earnings through long-term contracts. BofA recently raised its price target on SK Hynix to KRW700,000. Woo expects the recent rally in SK Hynix, as well as in Samsung Electronics, to sustain in the near term.

SK hynix Inc. (OTC:HXSCL) is a major global producer of memory semiconductors, including DRAM, NAND flash, and advanced high-bandwidth memory (HBM), used in AI and data center applications.

While we acknowledge the risk and potential of HXSCL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HXSCL and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.