SK Hynix reported its best quarter ever on Tuesday, but the numbers still fell short of what analysts had expected. Revenue hit 79.3 trillion won for the three months ended June, below the LSEG SmartEstimates consensus of 84 trillion won. Operating profit came in at 60.54 trillion won, also missing the 64 trillion won target. The stock dropped more than 3% at the open before recovering to trade up 0.19% by midday.
Record numbers, missed marks
The year-over-year growth is staggering. Revenue surged 257% from the same period last year, while operating profit jumped 557%. Net income soared 1,242% to 93.92 trillion won. Operating margin hit 76%. The company said the results were driven by sustained demand for AI infrastructure, with high-performance AI server products pushing up prices. First-half cumulative revenue exceeded 100 trillion won for the first time in the company's history.
Yet the market had priced in even more. The gap between reported profit and the consensus suggests investors expected the AI boom to deliver an even bigger windfall. SK Hynix shares have lost more than 40% over the past month, even though the stock is still up year-to-date. The disconnect between record earnings and a falling share price reflects worries that the semiconductor cycle may be peaking.
Why the stock is down despite record profits
The 40% monthly drop is a sharp reminder that even a company printing record numbers can get punished if expectations run too high. Analysts had been raising their forecasts aggressively as AI demand accelerated, and the actual results, while spectacular, didn't clear the raised bar. The operating profit miss of about 3.5 trillion won was enough to spook traders. The stock's intraday recovery suggests some buyers saw the dip as a buying opportunity, but the broader trend remains negative.
SK Hynix is also navigating a capital-intensive ramp-up. The company is expanding multi-year contract discussions to secure supply stability, a sign that it's locking in customers for the long haul. That strategy helps smooth out revenue but also ties up capacity and investment.
AI demand keeps the engine running
The core driver remains AI. SK Hynix said high-performance AI server products, including high-bandwidth memory (HBM), are driving price increases. The company is making progress on HBM4, the next generation of memory chips designed for AI workloads, and is expanding long-term customer partnerships. Those partnerships are likely with major AI chip designers and cloud providers, though the company didn't name them.
The multi-year contract push is a shift from the spot-market volatility that has historically plagued the memory industry. By locking in customers early, SK Hynix aims to smooth out the boom-bust cycles. The strategy appears to be working: the 76% operating margin is a sign of pricing power and cost discipline.
Cash pile and first-half milestone
SK Hynix ended the quarter with 88 trillion won in cash and equivalents, and a net cash position of 69.4 trillion won. That gives it plenty of firepower for R&D and capacity expansion. The first-half cumulative revenue topping 100 trillion won for the first time is a milestone that underscores how much the AI boom has transformed the company's fortunes.
The question now is whether the momentum can hold. HBM4 development is on track, but the broader memory market faces potential headwinds from geopolitical tensions and a possible slowdown in cloud spending. SK Hynix's next quarterly report, due in October, will show whether the record streak can continue — or whether the market's recent pessimism was justified.
