SK hynix Inc. (NASDAQ:SKHY)’s journey is a classic tale of how fortunes can change due to expanding industries. Its shares, traded on the Korean stock market, are up by 110% year-to-date due to the ongoing boom in memory demand from the AI infrastructure buildout. Additionally, the firm’s rising fortunes have also changed its employees’ financial situations overnight. Estimates suggest that SK hynix Inc. (NASDAQ:SKHY)’s employees in Korea could receive as much as $900,000 in bonuses in 2027. Cramer, on the other hand, holds a mixed opinion about the firm’s addition to the US stock market due to the potential effect on other stocks:
“SK Hijinx call has something for bears and bulls: demand great, capacity additions, great. I mean this thing is all over the place. And so is the stock. We have news reports calling the quarter amazing and others calling it disappointing. And this is the most important stock out there?
“We will rue the day we let this Monster into our markets. SK is more about margin calls and gambling than it is about DRAM pricing and capacity additions
“SK Hynix turn and Seagate good.. bears really trying to take apart good story with Hynix”
While Cramer believes that SK hynix Inc. (NASDAQ:SKHY)’s shares are trading more based on market activity than the fundamentals, the central debate around the firm remains unchanged. The meteoric rise in the Korea-listed equities has been driven by a solid first half of 2026, which saw the firm triple its revenue to KRW131.8 trillion from the year-ago figure of KRW39.8 trillion. The revenue growth also powers the bull case as the bulls point out that SK hynix Inc. (NASDAQ:SKHY) is at the dead center of a historic memory supercycle driven by AI demand.
Yet, the bears dive deeper into the income statement. They point towards SK hynix Inc. (NASDAQ:SKHY)’s Q2 operating profit. which sat at KRW60.54 trillion, to miss analyst estimates of KRW64 trillion. This miss is part of the broader debate about whether SK hynix Inc. (NASDAQ:SKHY) will be able to continue to benefit from aggressive AI capital expenditure spending or whether the market is at the proverbial ‘top.’
Another key factor that the bears point towards is long-term contracts. These contracts are now common in the memory industry as buyers race to lock in supply. However, the bears argue that in case memory prices rise further, SK hynix Inc. (NASDAQ:SKHY) might be unable to benefit from them as it has already signed the long-term agreements.
As to what the analysts think, Barclays initiated coverage of SK hynix Inc. (NASDAQ:SKHY) on July 14th. It set a $330 share price target and an Overweight rating. The bank argued that SK hynix Inc. (NASDAQ:SKHY) would continue to benefit from continued memory tightness and strong HBM memory chip pricing.
Looking at the multiples, SK hynix Inc. (NASDAQ:SKHY) is currently trading at a forward P/E ratio of 6.43, which is nevertheless elevated when compared to its US peer Micron’s multiple of 5.31. The multiple suggests that investors are more optimistic about SK hynix Inc. (NASDAQ:SKHY)’s growth compared to its American peer.
While Insider Monkey acknowledges the risk and potential of SKHY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SKHY that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
