An analysis from the securities industry set a target price for SK hynix as high as 1.5 million won. With the spread of artificial intelligence (AI), memory demand is structurally increasing while supply remains constrained, leading to an assessment that the memory industry is no longer staying in a traditional "cyclical" structure. As a result, despite the recent sharp rise in the share price, there is judged to be ample room for further gains.
SK Securities on the 28th maintained a "buy (BUY)" rating on SK hynix and raised its target price to 1.5 million won from 1 million won. As of the prior trading day, SK hynix shares were 800,000 won.
Han Dong-hee, an analyst at SK Securities, said the stronger-than-expected memory cycle led the firm to revise up its 2026 memory price increase assumptions to 71% for DRAM and 83% for NAND, adding, "Accordingly, 2026 operating profit is expected to rise 213% to 147 trillion won, with the operating margin up 23 percentage points (p) to 72%."
The analyst assessed that the structure of the memory industry cycle is changing. "With the AI cycle, overall memory demand is structurally increasing, but supply capacity is in a constrained phase," the analyst said. "Accordingly, the memory industry is transforming into a 'order first, expand later' structure based on long-term supply contracts and will begin to break away from being a cyclical industry."
The analyst added, "A sharp upward revision to short-term earnings expectations due to explosive memory price increases can be accompanied by concerns about slower growth ahead, but that logic applies only to the past cyclical industry," and explained, "An expansion in capital expenditures should also be interpreted not as a signal of peaking out due to oversupply, but as an indicator confirming solid contract-based demand."
The analyst continued, "Given that the memory industry is on the verge of a full-fledged valuation expansion phase, there is ample room for additional gains even though the stock price has risen steeply recently."