SKHY Stock Jumps Premarket: Strategist Says SK Hynix Sits At AI’s ‘Toll Booth’ As Tech Giants Chase Scarce Memory

Innes also warned that extraordinary margins will attract new capacity, potentially weakening pricing power as Samsung and Micron expand.

• Innes said scarce HBM is helping SK Hynix collect profits, while tech giants face pressure to justify AI spending.
• Long-term agreements with 14 major customers cover more than half of production capacity for 2027 and 2028.
• SK Hynix said DRAM and HBM supply is sold out until 2029, with memory shortages expected through 2030.

U.S.-listed shares of SK Hynix (SKHY) jumped 8% in premarket trading on Wednesday as Stephen Innes, managing partner at SPI Asset Management, highlighted how AI memory shortages are turning the company into a cash machine while technology giants face scrutiny over their spending.

SKHY shares rose 2% to $145.36 but are still down 21% for October.

SK Hynix Cashes In On AI’s Spending Spree

“Right now, SK Hynix is still sitting at the toll booth, and the cash machine is humming,” Innes said on his Substack. He added that high-bandwidth memory (HBM) has become key to AI performance, boosting the Nvidia supplier’s pricing power as customers compete for limited supply.

“Memory used to sit at the back of the technology factory. AI has dragged it to the front gate and handed it the keys,” he said. This puts SK Hynix in a different position from companies pouring money into AI models and data centers, Innes said. Model developers must find ways to monetize their services, while infrastructure operators face hefty power, financing and depreciation costs. The memory maker is already collecting revenue from a component they need.

“SK Hynix sits on the other side of that cheque. It is already getting paid,” he said, adding: “Scarcity has a wonderful way of simplifying the income statement.”

Innes: Multiyear Deals Could Cushion The Cycle

For Innes, the bigger story is in the years of production SK Hynix is securing under contract, potentially softening the pricing downturns that have historically followed memory-industry expansions.

The company has signed long-term agreements with 14 major customers that cover more than half of its production capacity for 2027 and 2028. The contracts typically run five years, with extensions under discussion and prices allowed to move within agreed ranges. SK Hynix said its DRAM and HBM supply is sold out until 2029, with HBM demand double what it can supply. It expects shortages to persist through 2030.

“Those contracts will not kill the cycle. Nothing kills the memory cycle. But they may blunt its teeth,” Innes said. The visibility reinforces his bigger argument that investors should distinguish between companies financing the AI buildout and those already profiting from it.

“The AI trade is increasingly separating into winners who consume capital and winners who harvest it,” he said.

Can SK Hynix Defend Its Pricing Power?

However, Innes warned that exceptional profits will draw more competition, with Samsung and Micron expanding their HBM businesses and SK Hynix adding capacity at Yongin. “The semiconductor industry has never met a fat margin it did not eventually try to murder with new capacity,” he wrote.

For Innes, the question is how long AI demand, manufacturing complexity and multiyear contracts can protect pricing power as supply grows. He argued that delivering on HBM4, securing Nvidia qualification, and maintaining spending discipline will become increasingly important. “Eventually, enough new roads will be built around the bottleneck,” he added.

SKHY Q3 Review

SK Hynix’s third-quarter (Q3) revenue rose 328% to 104.6 trillion won ($78.2 billion), while operating profit surged 632% to 83.3 trillion won, for an operating margin of 80%.

SK Hynix outlined about 100 trillion won in full-year shareholder returns through dividends, buybacks and cancellations, including previously announced repurchases. Special dividends will distribute most gains from its Kioxia investment.

Net cash reached 98.7 trillion won, supporting further investment alongside shareholder payouts. The company expects HBM4 to surpass HBM3E in shipment volume and revenue in the fourth quarter.

How Do Retail Traders Feel About SKHY?

On Stocktwits, retail sentiment for SKHY jumped to ‘extremely bullish’ from ‘bullish’ levels a day ago amid a 290% surge in 24-hour message volumes.

One user said, “$SKHY Glorious AI euphoria trade rages on. FOMO momo is now going to drag these way higher. Everyone “missed the dip” on HF”

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Another user said, “$SKHY these memory stocks are gonna be good for another two years easy, release the news”

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U.S.-listed shares of SK Hynix have declined 13% year-to-date.

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