SK hynix (NSDQ:SKHY) Surges 27% as Investors Reprice Its 58% HBM Leadership

The AI Memory Leader Finally Gets a US Market Spotlight

The AI memory market is racing to secure access to the enormous pools of capital available in the US equity market. That trend was on full display when SK hynix debuted its American Depositary Receipts (ADRs) on the Nasdaq on 10 July 2026, pricing the offering at US$149 per ADR.

What caught our attention wasn’t just the listing, but the market’s reaction. After initially pulling back around 10% on 13 July, the stock rebounded more than 27% in overnight US trading. We think investors began to recognise that, despite being the global leader in high-bandwidth memory (HBM) with an estimated 58% market share, SK hynix was still trading at a valuation discount to memory peers on both price-to-earnings and price-to-sales multiples.

The listing also raises a much bigger question. If US investors are willing to pay a premium for direct exposure to AI memory leaders, could this become the preferred capital market for the sector? Reports have suggested Samsung has explored a similar ADR listing following SK hynix’s blockbuster debut, although Samsung has publicly denied that it is currently reviewing such a plan.

So, what comes next for the newest AI memory heavyweight on the Nasdaq, and what does its debut tell us about where the next wave of capital is likely to flow?

Trades at 18x Earnings Despite Leading 58% of HBM

We compared the latest trailing twelve-month (TTM) financial metrics across the major memory players to understand how the market is valuing each business. Based on these figures, SK hynix was trading on a TTM P/E of around 18x and an EV/EBITDA multiple of 14.4x. Micron was valued similarly at roughly 20x TTM earnings and 15x EV/EBITDA.

What stands out is that SK hynix currently holds the leading position in the high-bandwidth memory (HBM) market, with an estimated 58% market share. Given its market leadership and dominant exposure to AI-driven demand, we think investors have begun to recognise that SK hynix arguably deserves to trade at a premium to its closest peers rather than at a discount or in line with them.

The contrast becomes even more apparent when looking at Sandisk. Despite operating in a less strategically advantaged segment of the memory market, Sandisk trades on a significantly richer valuation of around 53x TTM P/E and 43x EV/EBITDA. If the market is willing to award those multiples elsewhere in the sector, it raises the question of whether SK hynix’s valuation fully reflects its leadership in one of the fastest-growing areas of the semiconductor industry.

Re-Rates as 60% ASP Growth Drives Revenue Without More Volume

SK hynix is probably a company many investors are unfamiliar with, despite being one of the most important businesses powering the AI infrastructure boom. Its core business is manufacturing high-bandwidth memory (HBM), the specialised memory used alongside GPUs and CPUs in AI data centres. Put simply, the processor does the computing, while the memory stores and rapidly feeds the data required to perform those calculations.

Today, DRAM, including HBM, accounts for around 78% of SK hynix’s revenue, while NAND flash represents a much smaller part of the business.

What we find even more interesting, however, is how SK hynix is generating its growth. The company reports revenue as a function of two variables: bits shipped and the average selling price (ASP) per bit. Looking at the first quarter, bit shipments were broadly flat quarter-on-quarter, implying the company wasn’t materially increasing the volume of memory sold to customers. Instead, almost all of the revenue growth came from a 60% increase in the average price per bit.

That leaves us with two possible explanations. The first is that SK hynix is deliberately managing supply to preserve pricing power and maximise margins rather than chasing volume growth. The second is that demand remains so strong that customers are willing to pay substantially higher prices for HBM, allowing SK hynix to capture more revenue without shipping significantly more product.

The Investors Takeaway for SK Hynix

Looking ahead, the next chapter for SK hynix will be defined by its aggressive capacity expansion. The company is investing heavily to increase HBM production through the development of its Yongin semiconductor cluster, the expansion of its M15X fabrication facility, and the continued purchase of advanced ASML EUV lithography systems needed to manufacture next-generation memory chips.

However, SK hynix is not expanding in isolation. Competitors, including Samsung and Micron, are also investing billions of dollars to bring additional memory capacity online, while the US continues to incentivise domestic semiconductor manufacturing. Over the next several years, these projects are expected to result in a significant increase in industry supply.

History has shown that the memory industry is highly cyclical. Today’s supply-constrained environment has given SK hynix exceptional pricing power, but that advantage is unlikely to last indefinitely. As new capacity enters the market, supply and demand should gradually rebalance, placing downward pressure on pricing and, ultimately, margins.

While we continue to view SK hynix as the clear leader in the HBM market, we believe investors should remain disciplined. Chasing the stock after a sharp re-rating simply because the market is beginning to recognise its leadership may not offer the most attractive risk-reward. Instead, we would prefer to accumulate shares during periods of weakness, when valuation better reflects the cyclical risks that inevitably accompany the memory industry.