SK Hynix US Shares Soar 11.6% as Record Profit, 80% Margin and $75 Billion Payout Plan Electrify Wall Street

U.S.-listed shares of SK Hynix jumped nearly 12% on Wednesday. The South Korean memory chipmaker reported record quarterly profit and unveiled a roughly $75 billion shareholder return program, adding fuel to a rally in artificial intelligence stocks.

SK Hynix's American depositary shares rose $16.84, or 11.58%, to $162.20 in late-morning trading on the Nasdaq at 11:12 a.m. EDT.

The gains followed a surge in Seoul, where SK Hynix's common shares soared 10.89% to 1.49 million won and helped push South Korea's benchmark KOSPI up 6.63% to reclaim the 6,000 mark.

Record quarter

SK Hynix, the world's leading supplier of high-bandwidth memory chips used in AI processors, reported preliminary third-quarter results:

Revenue of 104.6 trillion won, up 328% from a year earlier and the first quarter in company history above 100 trillion won Operating profit of 83.3 trillion won, up 632% from a year earlier An operating margin of 80% Net income of 39.8 trillion won, up 216%

The company said strong demand for AI data center memory drove the results. Shipments of its newest HBM4 chips began in earnest during the quarter, and it expects HBM4 to surpass the older HBM3E in shipments and revenue in the fourth quarter.

Sales of server DDR5 memory and data center storage products also rose.

Demand to exceed supply through 2030

SK Hynix said it expects memory demand to outstrip supply through 2030, citing the difficulty of producing leading-edge chips and the long lead times needed to build new factories.

The company said it has signed long-term agreements with 14 major customers, including global cloud providers, covering more than half of its planned production for 2027 and 2028. The contracts typically run five years, and the company is discussing longer terms with some customers.

Massive shareholder returns

SK Hynix said it targets about 100 trillion won, or roughly $75 billion, in shareholder returns for 2026. That includes cash dividends of at least 30 trillion won and share buybacks and cancellations of at least 60 trillion won.

For the third quarter, its board approved a dividend of 20,000 won a share, including a 10,000-won special dividend funded by gains from its investment in Japanese memory maker Kioxia. It also approved a 20 trillion won share buyback.

Chief Executive Kwak Noh-Jung said the company's principle is to share most of the gains from successful strategic investments with shareholders.

SK Hynix ended the quarter with net cash of 98.7 trillion won.

US listing

SK Hynix listed American depositary shares on the Nasdaq in July in one of the largest U.S. listings by a foreign company. It sold about 177.9 million ADSs at $149 each, raising about $26.5 billion. Ten ADSs represent one common share.

The U.S. listing has given American investors direct access to one of the biggest beneficiaries of the AI boom.

Sector rally

SK Hynix's results lifted memory chip stocks around the world. Micron Technology rose nearly 5% on Wednesday, and storage companies also gained.

Bank of America analysts said they came away "incrementally more positive on memory" after the results, according to Investing.com.

The rally followed a difficult stretch for memory stocks, as investors worried that the memory cycle could peak and questioned the payoff from heavy AI spending. The KOSPI had fallen more than 35% from its June peak before rebounding this week.

AI trade revives

Wednesday's gains extended a revival in AI stocks this week. Anthropic, the developer of the Claude AI models, filed for a U.S. initial public offering on Monday, and data center equipment maker Vertiv reported Wednesday that its orders had more than doubled.

Investors are also watching quarterly results this week from Alphabet, Microsoft, Amazon and Meta Platforms, whose AI infrastructure spending drives demand for high-bandwidth memory.

What to watch

Investors will watch Samsung Electronics' quarterly results on Thursday for further confirmation of memory demand. The Federal Reserve announces its interest rate decision on Wednesday afternoon.

SK Hynix also said its new Yongin fab will begin full-scale operation next year, and that investment will rise significantly to meet demand.