Shares of SK hynix Inc. (KRX:000660; NASDAQ:SKHY) advanced in Seoul on Monday, recovering some ground after a sharp decline last week. The stock closed at 1,816,000 won, up 3.24%, following an 8.34% drop on Friday. The rebound recouped about 36% of the 160,000-won loss from the previous session.
The rally was supported by a broader chip sector upturn and fresh agreements in the artificial intelligence space. Over the weekend, Nvidia Corp. (NASDAQ:NVDA) and SK Group signed letters of intent for an AI project valued at more than $500 billion. Under the deal, SK hynix will supply long-term HBM memory and collaborate on next-generation AI memory development, with the first AI factory expected to launch in 2027.
In a separate announcement, presidential adviser Kim Yong-beom stated that SK hynix plans to provide $750 billion in long-term memory supplies to U.S. companies. However, specific delivery schedules and revenue timelines were not disclosed, leaving investors focused on the upcoming earnings report for more clarity.
The ADR premium remains a key focus for U.S. investors. Each American depositary share represents one-tenth of a common share in Korea. Based on Monday's exchange rate of 1,468.5 won per dollar, Seoul's closing level translates to $123.66 per ADS. In premarket trading, the ADR was quoted at $164.21, implying a premium of 32.8%. Since the Nasdaq listing, ADRs have traded at a premium ranging from 16% to 51% over Seoul shares. Conversion between the two instruments begins Wednesday, but limited eligible shares may temper arbitrage activity.
Market attention now turns to Wednesday's earnings release. A preliminary consensus from 14 brokerages projects record quarterly revenue of 84.1 trillion won and operating profit of 64.1 trillion won. That would represent sequential growth of 60% and 70.4%, respectively, and year-over-year surges of 278.3% and 595.8%. If realized, the single-quarter operating profit would surpass the total for all of 2025 by 35.8% (2025 full-year operating profit: 47.21 trillion won).
KB Securities analyst Kim Dong-won expects global technology and AI data center clients to account for 70% of SK hynix's total revenue this quarter, underscoring the company's deepening ties with the AI ecosystem. Investors will also scrutinize memory pricing, HBM demand, capital expenditure, and clarity on delivery schedules in the new supply deals.
Risks remain. Memory prices could weaken, letters of intent may not convert to firm orders, and the ADR premium could contract. Wednesday thus presents two challenges: delivering all-time high earnings and navigating the initial conversion window. One tests operational performance, the other market valuation.
The broader Seoul market also bounced back. The KOSPI rose 0.97%, with Samsung Electronics Co. (KRX:005930) gaining 1.8% to 254,000 won.
