SK Hynix rises 5% as brokerages launch coverage with bullish ratings

Recently listed U.S. shares of SK Hynix rose 5% after six brokerages started coverage of the South Korean chipmaker with bullish ratings, citing its dominance in the booming AI memory market and access to a broader global investor base.

The American Depositary Receipts of SK Hynix, whose primary listing is in Seoul, ‌were last ⁠up at $150.08 ⁠on Tuesday. However, they are trading 16% below their July 10 listing price due to a recent pullback in semiconductor stocks.

The company had priced its ADRs at $149 for ​the secondary listing and raised about $26.5 billion, aided by strong investor interest in AI-focused high-bandwidth memory (HBM) chips.


Massive AI infrastructure spending has fueled demand for ​HBM chips, driving up prices and making ⁠memory manufacturers ‌key beneficiaries of the artificial intelligence boom.

At least six ​brokerages, including ​BofA Global Research, started coverage on SK Hynix with ⁠a "buy"-equivalent rating. Rosenblatt Securities set the highest price target ​on the stock at $320.

Bank of America was the underwriter ​for SK Hynix's U.S. secondary offering, along with Citigroup, Goldman Sachs and J.P. Morgan.

"We believe the U.S. listing provides an opportunity for SKHY shares to re-rate closer to its U.S.-based rival (Micron), which should compound with a more structural re-rating of shares driven by longer-term visibility and ‌strong tie-in to AI and data center end markets," said analysts at William Blair.

However, the positive reception was in contrast ​to the ​company's latest earnings ⁠report, which came a few days after the U.S. listing.

SK Hynix posted a record quarterly profit but fell short of analysts' forecasts due to delays ​in shipments of advanced memory products, raising concerns about the pace of AI-related spending.

BofA said SK Hynix remains undervalued, citing strong orders from U.S. technology companies, leadership in high-end memory chips and expectations for "super-cycle" earnings as AI infrastructure spending continues to ramp up.