Jim Cramer calls the memory chip giant undervalued at 7x earnings, but warns investors about the boom-bust cycles that haunt the semiconductor industry.
SK Hynix just pulled off something no foreign company has ever done before. The South Korean memory chip maker raised approximately $26.5 billion through its American Depositary Receipt offering, priced at $149 per share, making it the largest US listing by a foreign company in financial history.
The offering, which landed on July 8-9, was more than 7x oversubscribed by long-only institutional investors.
Cramer’s take: cheap, but proceed with caution #
Jim Cramer broke down SK Hynix’s positioning in the global memory industry, and his verdict was characteristically split between enthusiasm and pragmatism. He noted the stock is trading at roughly 7x 2026 earnings estimates, a discount he directly linked to the explosion in AI-related spending.
But Cramer wasn’t ready to go all-in. He advised investors to start with small positions, pointing to the historical boom-bust cycles that define the memory chip market. His warning about potential supply surpluses in the future isn’t hypothetical fear-mongering. It’s pattern recognition.
Why AI is rewriting the memory chip playbook #
SK Hynix is a dominant producer of high-bandwidth memory, the specialized chips that AI accelerators need to function. Every time NVIDIA ships a new GPU for data center training, it needs HBM to go with it.
Recent earnings from Micron and forward guidance from NVIDIA both point in the same direction: demand for advanced memory is accelerating, not plateauing. These signals suggest an uptick in earnings estimates for SK Hynix, which could make that 7x multiple look even more attractive in hindsight.
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