Key Points
Operating profit jumped 557% year over year, driven by strong AI memory demand.
Record revenue and net profit still fell short of Wall Street expectations.
Shares declined as investors expected stronger HBM chip growth and earnings.
Long-term outlook remains positive, supported by rising AI infrastructure spending.
On July 29, 2026, SK Hynix reported a 557% increase in quarterly operating profit, helped by strong demand for high-bandwidth memory (HBM) chips used in artificial intelligence (AI) systems. The company also recorded its highest-ever quarterly revenue, reflecting continued growth in AI-driven memory demand. Even so, the results came in below market expectations, and the stock moved lower after the announcement.
SK Hynix Posts Record Quarterly Profit but Misses Forecasts
Key Q2 2026 Financial Highlights
SK Hynix delivered another record quarter on July 29, 2026, as AI memory demand remained strong. Operating profit rose to 60.5 trillion won, up 557% from the same period last year. Revenue increased 257% to a record 79.3 trillion won, while net profit reached 93.9 trillion won.
Growth continued to come from High Bandwidth Memory (HBM), which is widely used in AI accelerators powering data centres. Despite those record figures, the company fell short of analysts’ estimates. LSEG SmartEstimate had forecast operating profit of about 64 trillion won. That difference, although relatively small, became the focus for investors after the results were released.
Why Investors Expected Even More?
Investor expectations had climbed alongside the rapid growth of AI spending. Many expected stronger HBM shipments, higher earnings, and fresh shareholder return measures such as share buybacks.
When those expectations were not met, attention quickly shifted from the company’s record performance to the earnings miss. That change in sentiment weighed on the stock.
Why SK Hynix Shares Fell Despite Strong Earnings?
Why Did the Stock Drop After Record Results?
Markets often respond to expectations rather than headline numbers. Although SK Hynix reported record earnings, investors had already priced in even stronger results.
Analysts also pointed to slower-than-expected shipments of next-generation HBM4 memory chips during the quarter. At the same time, the broader technology sector was under pressure, encouraging some investors to take profits after a strong rally in semiconductor shares.
HBM4 Production and AI Market Expectations
SK Hynix remains one of the world’s leading suppliers of HBM chips used with advanced AI processors. Investors, though, want production to increase more quickly as cloud companies continue expanding AI infrastructure.
The company plans to lift capital spending to the upper end of its guidance and has signed several long-term AI memory supply agreements. Those contracts provide better visibility into future revenue, although some analysts believe they could limit short-term pricing gains.
AI Memory Demand Remains Strong Despite the Earnings Miss
What Supports Long-Term Growth?
Demand for AI memory continues to support SK Hynix’s business.
Some of the main growth drivers include:
- Strong demand for HBM chips used in AI servers.
- Continued investment by major cloud companies.
- Multi-year supply agreements with around 10 major AI customers.
- More memory required in advanced AI systems.
The company also said cumulative first-half revenue exceeded 100 trillion won for the first time, reflecting continued growth in the AI memory market.
Company Outlook for the Second Half of 2026
Management expects AI demand to remain strong through the rest of 2026. The company plans to expand production capacity while keeping spending under control. It also intends to continue investing in advanced memory technology to strengthen its position in the AI chip market.
What Investors Should Watch Next?
Investors will be watching HBM4 production, AI infrastructure spending, and memory pricing over the next few quarters. Another area to follow is SK Hynix’s shareholder return strategy, which management expects to announce later this year.
According to Meyka, the stock’s long-term outlook remains supported by demand for AI memory, although short-term volatility may continue after the earnings miss. Meyka’s AI stock analysis tool also points to improving long-term fundamentals despite weaker market sentiment. Other analysts still expect earnings to grow as demand for AI memory chips continues to increase.
Conclusion
SK Hynix reported record earnings, but investors had expected more. Even with the earnings miss, demand for AI memory chips remains strong, and the company continues to benefit from growing investment in AI infrastructure. Its position in the HBM market and continued investment in advanced memory technology support the business, while HBM4 production and shareholder return plans will remain in focus over the coming months.
Disclaimer:
The content shared by Meyka AI PTY LTD is for research and informational purposes only. Meyka is not a financial advisory service, and the information provided should not be treated as investment or trading advice.
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