Key Points
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After the popularity of Micron Technology stock among U.S. investors, competitor SK Hynix has now entered the fray with an ADS listing on July 10.
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SK Hynix’s leadership in high-bandwidth memory chips make its products ideal for AI.
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The company reported a 198% year-over-year increase in first-quarter revenue.
- 10 stocks we like better than SK Hynix ›
The artificial intelligence tailwind has transformed the trajectories of companies in the tech sector, including Micron Technology. AI’s need for enormous computational power has produced unprecedented demand for advanced memory chips, Micron’s forte. Consequently, its business benefited, and so did its stock price, as shares skyrocketed more than 600% over the past 12 months through July 15.
Given this backdrop, it was inevitable that competitors would court U.S. investors. That’s exactly what South Korean memory giant SK Hynix (NASDAQ: SKHY) did when it began offering American depositary shares (ADS) at $149 per share on July 10. It became the largest listing ever by a non-American company — a sign of the extraordinary appetite for memory chip stocks among U.S. investors.
Is SK Hynix bound to follow Micron’s spectacular stock rise? Here’s a deeper look into the company to assess whether now is the time to invest in the Korean manufacturer.
A look at SK Hynix’s business
SK Hynix produces high-bandwidth memory (HBM) products that enable fast data processing speeds. This is an essential capability for artificial intelligence systems that must churn through mountains of data quickly to execute tasks.
HBM memory is key to the company’s growth. As AI models become more sophisticated, their performance hits what’s called the “memory wall.” This is where data cannot flow fast enough through AI systems powered by traditional products. HBM memory solves this bottleneck.
As a testament to the company’s strength in this arena, AI semiconductor titan Nvidia signed a multiyear partnership with SK Hynix. The pair will co-develop advanced memory chips in support of AI’s rapid evolution and adoption across industries.
In addition, earlier this year, the memory manufacturer announced it had produced the world’s first 1cnm LPDDR product. This memory chip delivers processing speeds 33% faster than existing solutions, and is 20% more energy efficient, making it ideal to support AI in devices such as smartphones and tablets.
This cutting-edge product positions SK Hynix to capture more of the memory market. At the end of the first quarter, the company touted itself as the world leader in HBM memory chips with an impressive 56% market share.
SK Hynix’s business growth
SK Hynix’s first-quarter business performance illustrates its leadership in AI memory. Q1 revenue rose a jaw-dropping 198% year over year to 52.6 trillion Korean won. This is much stronger growth than the 47% year-over-year increase seen in 2025, suggesting that 2026 sales may be substantially larger than last year’s. In fact, industry estimates predict the 2026 global memory market will reach $633 billion, a significant jump from 2025’s $216 billion.
More industry growth is on the way. About 12,000 data centers exist worldwide today. Forecasts indicate that the new data centers under construction to support AI will double global capacity by 2030. The sector’s expansion provides a tailwind for SK Hynix’s business over the next several years.
This is part of why the company pursued its ADS listing. SK Hynix plans to use the $26.5 billion raised in its U.S. debut to increase manufacturing capabilities as it seeks to keep pace with massive AI demand.
Another factor in the company’s favor is that industry supply constraints have driven up prices, contributing to the outsize Q1 sales. As a result, the company achieved Q1 gross profit of 41.7 trillion won, a more than 300% year-over-year increase. This trickled down into net income of 40.3 trillion won, representing 398% growth compared to Q1 2025.
To buy or not to buy SK Hynix stock
SK Hynix’s substantial scale and market share are strengths, and long-term deals, such as the one with Nvidia, help to secure sales for years. It plans to open its first U.S. production facility in Indiana, diversifying its footprint beyond South Korea and establishing a manufacturing presence in its largest market.
But after its successful U.S. debut, the forward price-to-earnings ratio (forward P/E) for SK Hynix shares edged up to 10, higher than Micron’s 6, an indication that it’s more expensive. Forward P/E tells you how much investors are paying for a dollar’s worth of earnings based on analyst estimates for the next 12 months.
Consequently, now is a risky time to invest in SK Hynix, as you could end up paying too much. Also, it’s worth noting that each ADS represents only one-tenth of a Korean share.
That said, if the memory market continues to see unprecedented demand for HBM memory chips, SK Hynix stands to benefit. If you have a high risk tolerance, it’s worth buying the stock when the price drops.
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Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
