SK Hynix shares closed Tuesday at $130.17, falling 8.98% after the South Korean memory-chip manufacturer reported June quarter revenue and operating profit below analysts' expectations. The company posted operating profit of 60.5 trillion won versus the analyst forecast of 64.2 trillion won, while revenue reached 79.3 trillion won compared with the consensus estimate of 83.9 trillion won. The stock decline reflected growing concerns that the artificial intelligence investment boom may be losing momentum, despite SK Hynix delivering substantial year-on-year growth with operating profit up 557% and net income up 1,242%.
SK Hynix Reports Operating Profit of 60.5 Trillion Won
SK Hynix reported operating profit of 60.5 trillion won, or approximately $42 billion, for the June quarter. The figure represented an increase of 557% from the previous year but fell short of analysts' average forecast of 64.2 trillion won. Quarterly revenue reached 79.3 trillion won, compared with the consensus estimate of 83.9 trillion won.
Net income increased 1,242%, exceeding expectations with help from one-time investment gains. Several brokerages, including Mirae Asset Securities, reduced their quarterly profit estimates for SK Hynix due to slower growth in average selling prices.
SK Hynix Market Value Falls Over $500 Billion Since June
SK Hynix has lost more than $500 billion in market value since June. The company's valuation has fallen by approximately 45% in about a month as investors question whether technology companies will generate adequate returns from their AI infrastructure investments.
SK Hynix ADRs closed Tuesday at $130.17, falling 8.98%, or $12.85, during regular trading. The stock recovered slightly after the closing bell, rising 1.70% to approximately $132.39.
SK Hynix CEO States Memory Shortages Could Persist Beyond 2030
SK Hynix CEO Kwak Noh-Jung said severe memory shortages could persist beyond 2030 as cloud-service providers increase their orders and AI workloads require more advanced memory. SK Group signed a partnership with Nvidia that the companies said could involve more than $500 billion in business. The figure includes Nvidia's purchases of memory chips and SK Group's acquisition of Nvidia-powered supercomputers.
FAQ
What did SK Hynix report for the June quarter?
SK Hynix reported operating profit of 60.5 trillion won and revenue of 79.3 trillion won for the June quarter. Operating profit increased 557% year-on-year, while net income rose 1,242%.
Why did SK Hynix stock fall on Tuesday?
SK Hynix shares fell 8.98% on Tuesday after the company's June quarter operating profit of 60.5 trillion won and revenue of 79.3 trillion won came in below analysts' forecasts of 64.2 trillion won and 83.9 trillion won respectively.
What partnership did SK Group announce with Nvidia?
SK Group signed a partnership with Nvidia that the companies said could involve more than $500 billion in business, including Nvidia's purchases of memory chips and SK Group's acquisition of Nvidia-powered supercomputers.
