Investors sold off SK Hynix stock despite a 557% annual profit surge, citing concerns over AI spending sustainability and capital expenditure plans.
SK Hynix shares fell over 1% in premarket trading Wednesday, extending an 8% decline from the prior session. The memory chipmaker reported a record second-quarter operating profit, up 557% year-over-year, but results fell short of elevated expectations.
The earnings miss stemmed from a less favorable product mix rather than weakening AI memory demand, management said. The company reiterated that demand will outpace supply through 2030 but announced plans to increase 2026 capital spending by 50% to at least $31 billion, raising overinvestment concerns.
Barclays cut its price target on SK Hynix’s US-listed stock to $300 from $330, maintaining an Overweight rating. Susquehanna also lowered its target on the South Korean shares as chip stocks dragged the KOSPI Composite down nearly 6%.