SK Hynix shares climbed 5.73% to 1,292,000 won on Monday, contributing to a fresh record for Seoul's benchmark KOSPI index as investors piled into artificial intelligence-related chip stocks. The rally underscores strong market optimism for companies tied to AI data centers, particularly semiconductor and power-equipment firms within the AI value chain, according to Lee Kyoung-min, an analyst at Daishin Securities.
The stock earlier surged more than 7% to an all-time high following Intel's earnings results, which reignited expectations for AI-driven demand. Local rival Samsung Electronics also rose 2.5%, though it faces a potential strike by unionized workers in May, adding an element of labor risk to its outlook.
AI Trade Overrides Macro Headwinds
Despite a nearly 3% rise in oil prices due to stalled U.S.-Iran peace talks threatening Middle East energy exports, equity investors continued to favor AI-related names. Markets in Tokyo and Seoul traded near record levels. Mike Seidenberg, senior portfolio manager for Allianz Technology Trust, noted that AI is "very much considered a winner" in the current environment.
SK Hynix sits at the center of this trade as a leading supplier of high-bandwidth memory (HBM), a type of stacked memory essential for fast data movement in AI processors. The company reported first-quarter revenue of 52.5763 trillion won, operating profit of 37.6103 trillion won, and net profit of 40.3459 trillion won, achieving an operating margin of 72%.
Supply Constraints Amplify Appeal
The supply narrative is particularly compelling. Ki Tae Kim, head of HBM sales and marketing at SK Hynix, stated that client requests for HBM supplies over the next three years "already far exceeds" production capacity. This scarcity is reflected in pricing: contract prices for some DRAM chips, the short-term memory used in servers and computers, jumped nearly 83% in the first quarter, while some NAND storage products rose around 160%, according to Reuters.
The competitive landscape remains clear for investors. Samsung is riding the same AI chip cycle but carries labor risk from the potential strike. TSMC, the Taiwan-listed chip foundry, has also posted record first-quarter profit and eight consecutive quarters of double-digit growth. SK Hynix stock has nearly doubled this year, keeping it at the forefront of the Asian AI rally.
Risk Factors and Market Sentiment
However, risks are equally evident. South Korean retail investors have been selling into the rally, offloading a net 14.8 trillion won of shares on the main bourse this month through Friday, with about 62% of that concentrated in Samsung Electronics and SK Hynix. Kim Dong-won, a senior researcher at KB Securities, warned that a worst-case Samsung strike could require another "two to three weeks" to restore normal operations. He added that semiconductors remain cyclical, and peak optimism can turn quickly if memory prices cool or data-center spending slows.
Despite these concerns, SK Hynix presents a narrow but powerful case for global investors seeking exposure outside the U.S. It is not a defensive holding, and it is no longer undiscovered. Yet for today's market, the stock offers the strongest combination of fresh momentum, earnings strength, and supply scarcity on the tape.
