SK Hynix shares fall as exponential earnings growth fails to satisfy AI-charged expectations
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- SK Hynix shares fell 6.5% on Thursday after Q2 revenue of 79.32 trillion won ($54.55 billion) missed LSEG SmartEstimates of 84 trillion won, despite 257% YoY growth — the first time H1 cumulative revenue exceeded 100 trillion won.
- Operating profit reached 60.54 trillion won (vs. 64 trillion won expected), soaring nearly 557% YoY and gaining 61% QoQ as DRAM and NAND flash prices both rose quarter-over-quarter.
- HBM4 mass shipments began in Q2 with HBM4E sample shipments completed in H1, as SK Hynix touted differentiated power efficiency and cost competitiveness for its AI server memory.
- NAND 321-layer products already capture the largest share of SK Hynix's total production, targeted to reach approximately 50% of domestic production capacity by year-end.
- eToro's Josh Gilbert highlighted an 83% gross margin, saying pricing power is intact: "That doesn't exist in a market where demand is drying up; it exists in one where customers are fighting over supply."
- Capital expenditures for 2025 are expected to reach the high 40 trillion won range, with the company planning to build on its Nasdaq ADR listed earlier this month.
- Nvidia is a key SK Hynix client, with a recently expanded multiyear deal worth over $500 billion underscoring the AI supply chain interdependence.
Why it matters: Even with explosive growth, the stock dropped — showing how AI darling valuations have set an impossibly high bar. SK Hynix missed estimates by roughly 5% on revenue and 5% on operating profit, yet an 83% gross margin confirms underlying pricing power remains intact, making the selloff a sentiment event rather than a fundamental one.
