SK Hynix’s Record Profit Misses Investors’ Lofty AI Expectations

SK Hynix Inc. reported a 557% rise in quarterly operating profit to 60.5 trillion won ($42 billion), missing analysts' average estimate of 64.2 trillion won and fueling fears that the AI-driven semiconductor boom may be slowing. The Nvidia Corp. supplier's revenue of 79.3 trillion won also fell short of the 83.9 trillion won consensus, while net income surged 1,242% on one-time gains. The company has lost over $500 billion in market value since June amid concerns about debt levels and valuation sustainability.

Bloomberg -- SK Hynix Inc.'s quarterly profit rose a smaller-than expected 557%, adding to heightened fears that an AI boom that has propelled the semiconductor industry may be decelerating. Most Read from Bloomberg - Chip Rout Deepens on Circular Funding, China Competition Fears https://www.bloomberg.com/news/articles/2026-07-28/korean-stocks-sink-as-chipmakers-plung-on-deepening-ai-fatigue?utm campaign=bn&utm medium=distro&utm source=yahooUS - Apple Set to Make Big Smart Home Push With Siri AI at Center https://www.bloomberg.com/news/articles/2026-07-28/new-apple-tv-4k-box-homepod-mini-and-siri-ai-smart-home-hub-are-coming?utm campaign=bn&utm medium=distro&utm source=yahooUS The key supplier of Nvidia Corp. reported operating profit of 60.5 trillion won $42 billion in the June quarter versus analysts' average projection for 64.2 trillion won. Revenue came to 79.3 trillion won, against the average estimate of 83.9 trillion won. That's as the company won multiyear contracts with around 10 customers, it said. Net income surged a bigger-than-expected 1,242% on one-time investment gains. SK Hynix, which leapt past Samsung Electronics Co. to take the lead in the red-hot AI memory arena, has shed more than $500 billion of value since June as doubts grew about whether spending will justify lofty valuations. Tech companies' rising debt levels are also weighing on investors' minds. The growing amounts of leverage tied to players like SK Hynix turbo-charged volatility across Korea's bourse, wiping out roughly 45% of the company's value in about a month. Click here for a liveblog covering SK Hynix's results. "When you're the dominant supplier of the high-bandwidth memory that powers Nvidia's chips, the AI boom lands directly on your bottom line," said Josh Gilbert, Etoro's lead analyst for APAC and the Middle East. "That means the market is unlikely to focus on the headline numbers alone. The bigger question is whether margins and guidance can justify its recent performance." Investors worry that soaring chip costs may trigger a broader economic slowdown, pushing prices of electronics higher and spurring manufacturers to cut production of devices like PCs and smartphones. Brokerages including Mirae Asset Securities Co. have trimmed their second-quarter profit estimates for SK Hynix in recent weeks, citing moderated growth in average selling prices of chips. Chipmakers have pushed back, saying that demand is expected to outstrip supply for the long term. They point to customers such as cloud service providers ratcheting up orders for memory, lifting both volumes and margins. SK Hynix Chief Executive Officer Kwak Noh-Jung told Bloomberg earlier this month that the severe memory chip shortages that are roiling the computer, car and device makers would likely persist beyond 2030.