SK Hynix's record profit fails to impress investors - Yahoo Finance

What the report says

Yahoo Finance reported that semiconductor shares sold off Wednesday after SK Hynix posted record second-quarter operating profit but still missed elevated investor expectations. The South Korean memory chipmaker’s operating profit was up 557% from a year earlier, yet the result did not reassure a market already questioning whether the artificial intelligence investment boom can keep accelerating.

The weakness spread across major chip names. The PHLX Semiconductor Index fell more than 5%, while Nvidia declined more than 3% and AMD dropped about 5%. Memory and storage companies were hit harder, with Micron and SanDisk down 9% and 7%, respectively, after paring earlier losses. U.S.-listed SK Hynix shares fell more than 2%, and the company’s South Korean shares had already dropped more than 8% in the prior session.

According to Yahoo Finance, the disappointment stemmed from a less favorable product mix rather than softer demand for AI memory. SK Hynix management said it still expects demand to exceed supply through 2030, but investors focused on the company’s plan to raise 2026 capital spending by roughly 50% to at least $31 billion as it expands AI memory production. Barclays lowered its price target on the U.S.-listed shares to $300 from $330 while keeping an Overweight rating, and Susquehanna also reduced its target for the Korean-listed stock.

The selloff came amid broader concerns about AI infrastructure spending, rising competition and potential memory oversupply. Yahoo Finance noted that Samsung and SK Hynix helped drag South Korea’s KOSPI down nearly 6%, while the strong Shanghai debut of Chinese memory maker CXMT added to pricing worries. A hawkish Federal Reserve rate hold also weighed on market sentiment.