SK Hynix Shares Soar 13% on Strong Earnings

SK Hynix shares surged more than 13% in New York trading on Wednesday after the company reported earnings and guidance that exceeded analyst expectations. The rally lifted other semiconductor stocks, with Micron rising almost 6%, Arm gaining 4%, and AMD adding 3%. This performance counters a recent trend where strong profits have failed to boost AI-linked shares amid investor doubts about data center costs.

The move followed SK Hynix’s announcement of revenue that beat estimates by roughly 6%. The company’s gross margins reached 85.7%. Management forecast shipment growth in the mid-20% range for the current quarter, up from 10% in the third quarter. CNBC host Jim Cramer noted that the stock trades at only four times 2027 earnings, a low valuation that reflected concern over the duration of the memory boom.

Cramer argued that the low multiple left room for a rally once the numbers arrived. He stated, “SK Hynix put on a clinic last night about how you can get your stock to move higher.” He added that accelerating growth appeals to investors who anticipate continued expansion in the sector.

A key factor in the stock’s rise was the company’s statement that its production is effectively sold out through 2029. This capacity is secured by long-term customer agreements. Cramer viewed this as evidence that demand for memory chips used in AI data centers remains strong.

The company also announced plans for heavy spending on new manufacturing equipment. Historically, such expansion has raised fears of oversupply and falling prices. Cramer said, “This time, demand is so strong that Hynix knows that more supply won’t sate the market.” He described the company’s confidence in its demand outlook as extraordinary. SK Hynix also outlined sizable returns to shareholders through dividends and buybacks.

Cramer, who manages the CNBC Investing Club portfolio, said the results are encouraging for Micron. Micron trades at a low multiple and holds similar long-term customer agreements. He noted that the chipmaker could direct its growing cash pile toward a significant buyback once CHIPS Act funding restrictions ease on Dec. 9.