SKHY Hits Record Earnings: Can HBM4 Expansion and Massive Shareholder Returns Trigger a Trend Reversal?

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2026/10/28 06:32

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SKHY Hits Record Earnings: Can HBM4 Expansion and Massive Shareholder Returns Trigger a Trend Reversal? image 0

Earnings Beat Expectations, Creating a Potential Reversal Catalyst

SK hynix (SKHY) delivered another record-breaking quarter on October 28, reporting Q3 revenue of KRW 104.62 trillion, up 328% year over year, and operating profit of KRW 83.33 trillion, surging 632%. Its operating margin reached an exceptional 80%, with revenue and operating profit exceeding consensus estimates by approximately 6.5% and 8.3%, respectively.

Following the announcement, its Korean-listed shares rose 7.76% as of 11:20 a.m. local time, reflecting a positive market response to both earnings and shareholder returns. However, net profit of KRW 39.78 trillion declined 58% sequentially, primarily due to foreign exchange and investment-related losses, highlighting the importance of distinguishing operating performance from non-operating fluctuations.

HBM4 Expansion and Long-Term Contracts Strengthen Earnings Visibility

Growth continues to be driven by rising memory prices and product upgrades across HBM and conventional server memory. HBM4 has entered volume shipments, with the company expecting both shipments and revenue to surpass HBM3E in Q4. Additional capacity at its M15X facility, alongside strong demand for server DDR5 and 321-layer enterprise SSDs, provides further momentum.

Importantly, SK hynix has secured long-term supply agreements with 14 major customers, covering more than 50% of its total capacity for 2027–2028. These commitments significantly improve future revenue visibility.

The company also announced approximately KRW 100 trillion in shareholder returns for 2026, including previously announced share repurchases and special dividends partly funded by gains from its Kioxia investment.

These initiatives could support a valuation re-rating. However, substantially higher capital expenditure in 2027, capacity expansion by Samsung and Micron, and potential changes in AI infrastructure spending remain key risks to memory pricing and profitability.

Shares Rebound From Recent Lows, but Is the Downtrend Over?

SKHY is approaching a critical technical juncture. The stock closed at $145.36 on October 27, gaining 1.92% and extending its advance to three consecutive sessions from the October 22 intraday low of $130.79. Trading volume reached approximately 24.87 million shares, above its 30-day average, indicating renewed buying interest.

Nevertheless, the stock remains roughly 27% below its September peak of $199.87, suggesting that the broader downtrend has yet to be decisively reversed.

The $148–152 zone represents immediate resistance, encompassing the October 19 high and a recent high-volume trading area. A convincing breakout supported by stronger volume could open the way toward $160, followed by the 50-day moving average near $169.

On the downside, $139–143 serves as the initial support zone. A breakdown would bring the October 22 low of $130.79 back into focus.

Trading Outlook: Watch for Breakout Confirmation

The earnings surprise strengthens the bullish fundamental case, but a sustained reversal still requires confirmation from price action and trading volume.

If SKHY breaks above $152 and holds that level on expanding volume following the October 28 U.S. market open, the recovery could extend toward $160. Conversely, if an earnings-driven gap higher quickly fades, traders should monitor the opening gap and the $139–143 support zone.

A decline below $130.79 would signal that the previous downtrend remains dominant. The Federal Reserve's upcoming policy decision and broader risk appetite toward AI-related stocks will also influence the sustainability of this rebound.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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华尔街见闻•2026/10/28 12:27