With SK hynix setting a new record high on the back of a semiconductor rally, market forecasts have emerged that its annual operating profit in 2026 will exceed 80 trillion won. The implication is that it could surpass 20 trillion won in quarterly operating profit, a mark no Korean corporations have achieved.
As of 10 a.m. on the 21st, SK hynix shares were trading at 501,000 won on the KOSPI market. The stock rose 3.19% (15,500 won) from the previous day. During the session, the price climbed to 502,000 won, breaking above the 500,000-won level for the first time since joining SK Group.
Positive expectations for earnings appear to have stoked investor sentiment. Global investment bank Citi group on the 20th (local time) raised its target price for SK hynix to 640,000 won from 480,000 won. Among 36 institutions worldwide that have issued investment opinions on SK hynix, it is the highest.
Citi group projected that semiconductor prices will continue to rise through 2026, considering global demand for memory chips used for artificial intelligence (AI) inference. It said this trend will act as a "catalyst" to lift SK hynix shares.
Citi group presented a fourth-quarter operating profit estimate of 15 trillion won for SK hynix this year. That is 23% higher than the market consensus of 12.2 trillion won. Citi group in particular expected SK hynix to earn 81.5 trillion won in operating profit in 2026.
While not to the same extent as Citi group, optimism prevails in the domestic securities community. The 2026 annual operating profit estimate for SK hynix offered by 36 domestic and foreign securities firms is 55.15 trillion won, 37.4% higher than this year's annual operating profit estimate.
The main basis is that memory semiconductors could face a severe supply shortage. UBS, in a recent report, called 2026 "a once-in-10-years year for memory semiconductors," noting that surging demand from hyperscalers (large-scale cloud corporations) may outpace supply, allowing DRAM and NAND flash prices to post double-digit percentage gains each quarter.
Earlier, Morgan Stanley also projected that the semiconductor cycle will continue its uptrend through the first half of 2026. JPMorgan expected the semiconductor "supercycle" to continue through 2027.
Still, some are concerned about the possibility of short-term overheating. Even target prices reflecting SK hynix's higher earnings outlook average 521,000 won, not far from the current price.
In particular, in the process of securities firms competitively raising target prices, there are many cases of overestimating valuation (corporations' appraisal value). In fact, as recently as three months ago, Citi group cut its target price for SK hynix to 380,000 won, then raised it as the share price climbed.
The balance of supply and demand is also changing. Foreign investors, who had been buying SK hynix shares and pushing up the price, turned net sellers by 750 billion won this month through the previous day. During the same period, institutions and individuals recorded net purchases of 381 billion won and 292 billion won, respectively.