SK Hynix Inc (NASDAQ:SKHY) has received an ‘Outperform’ rating from Wedbush on Tuesday as the firm initiated coverage with a KRW2.56 million price target, citing a tight memory supply environment, the company’s technology position and an attractive valuation.
The company’s Nasdaq-listed shares were up nearly 6% at about $151 on Tuesday, while its Korea shares traded at about KRW1.57 million
Wedbush wrote that it remains bullish on memory stocks, arguing that vendor forecasts could continue to rise until substantial new production capacity comes online. The firm highlighted the severity of the current supply shortage, noting that server vendors are reducing product specifications because of limited availability while there have been no apparent meaningful customer inventory builds despite the length of the current upcycle. The analysts also pointed to constraints on new capacity, with a lack of available clean-room space creating multi-year lead times for additional fabs.
The firm believes capacity additions before 2028 will necessarily be modest and wrote that it remains unclear when new facilities will ultimately provide enough supply to meet accelerating demand. On technology, Wedbush highlighted SK Hynix’s sustained leadership in high-bandwidth memory shipments, its early introduction of 1c-based designs and its leading position in the QLC market as signs of a strong, if not leading, competitive position. Valuation was another key part of the investment case.