[Edaily Reporter Kim Kyung-eun ] KIWOOM Securities noted that while SK hynix(000660)’s second-quarter earnings fell short of market expectations, it forecasts a significant improvement in third-quarter earnings due to a base effect. Accordingly, the firm upgraded its investment rating from “Outperform” to “Buy.” However, it lowered the target price from 2.6 million won to 2.2 million won to reflect the earnings outlook for DRAM.

Park Yu-ak, an analyst at KIWOOM Securities, stated in a report on the 30th, “At this point, we recommend increasing exposure in anticipation of a short-term rebound in the stock price.”

SK hynix’s second-quarter revenue and operating profit came in at 79.3 trillion won and 60.5 trillion won, respectively, falling short of both the company’s previous forecast and the market consensus. The firm cited the fact that price increases for standard DRAM and NAND—at 37% and 56%, respectively—remained below the market average as the cause of the weak performance.

However, the firm assessed that these results would actually heighten expectations for an improvement in third-quarter performance. It explained that, given second-quarter prices were lower than expected, a base effect is expected to occur, and with the production and shipment of sixth-generation High Bandwidth Memory (HBM4) returning to normal, there is a high likelihood of a rebound in both earnings and the stock price.

SK hynix’s third-quarter revenue is projected to reach 98.9 trillion won, and operating profit 78.5 trillion won, representing increases of 25% and 30%, respectively, compared to the previous quarter. The forecast indicates that prices for both general-purpose DRAM and NAND will rise by approximately 20%, exceeding market expectations. Furthermore, as shipments of HBM4 to NVIDIA ramp up in earnest, both shipment volumes and average selling prices (ASP) are expected to improve simultaneously.

Analyst Park explained that, given global server shipments are expected to grow by 17% this year and 23% next year, further increases in server DRAM (DIMM) prices are also anticipated.

He stated, “Factors that had previously caused market concern—such as valuation pressures, concerns over North American artificial intelligence (AI) capital expenditures (CapEx), and the IPO of China’s Changxin Memory (CXMT)—have already been largely factored into stock prices,” adding, “Considering the earnings growth potential of HBM in 2027–2028, current stock prices are in a sufficiently attractive range.”