SK Hynix shares surged after the South Korean memory maker delivered third-quarter revenue of 104.62 trillion won, or $77.9 billion—a 328 percent increase year over year that surpassed the average analyst estimate of 98.34 trillion won, or $73.2 billion.
Operating profit climbed 632 percent to 83.33 trillion won, equivalent to $62 billion, significantly exceeding the analyst estimate of 76.72 trillion won, or $57.1 billion, driven by surging memory prices.
Gross margins expanded to 86 percent from 57 percent a year ago. Operating margins rose to 80 percent from 47 percent in the prior year, a 400 basis point sequential expansion.
SK Hynix holds approximately 50 percent of the high bandwidth memory market share and serves as the lead supplier of HBM to Nvidia, a critical advantage as artificial intelligence infrastructure spending accelerates. The company confirmed its DRAM and HBM volumes are effectively sold out through 2029. HBM4 prices will increase next year alongside expected improvements in mass production yields, driving revenue and profit growth in 2027.
Current HBM demand exceeds SK Hynix's supply capacity by more than two times, indicating tight market conditions. Recent negotiations have also narrowed the profitability gap between HBM and conventional DRAM.
More than half of SK Hynix's volume capacity for 2027 and 2028 is already committed under long-term agreements. The company holds 14 signed LTAs with five-year terms and is working on extensions with existing customers.
SK Hynix's NAND flash business will benefit from tiered memory architectures. Agentic AI and long-context use cases create cost and capacity constraints for storing all data in HBM and DRAM, increasing reliance on flash-based SSDs. The company's bullish outlook on NAND reflects this structural tailwind.
SK Hynix announced a 20 trillion won, or $14.9 billion, share buyback plan and will pay a 14 trillion-won dividend, or $10.4 billion, which includes gains from its investments in Kioxia.
The stock trades at a forward price-to-earnings ratio of 4.5 times 2027 analyst estimates. Combined with its dominant HBM position, sold-out production through 2029, and committed long-term customer agreements, the valuation supports continued upside potential.
