South Korean memory giant SK Hynix reported a record quarterly net profit of 93.9 trillion won, or about $64 billion, only for its shares to fall nearly ten per cent.
Revenue for the second quarter reached 79.3 trillion won, while operating profit climbed to 60.5 trillion won. Net profit was more than 13 times higher than a year earlier.
The company posted a 76 per cent operating margin, which would normally cause investors to break out the champagne and begin naming children after the chief financial officer.
According to the Wall Street Journal, what got Wall Street’s goat was that the operating profit fell short of its bullish forecasts of about 64 trillion won, so the market treated one of the largest corporate profits in history as a mild administrative failure.
SK Hynix has become one of the biggest winners from the AI boom because of its lead in high-bandwidth memory, which Nvidia and other accelerator makers need in increasingly ridiculous quantities.
Demand from data centres helped lift revenue by 257 per cent and operating profit by 557 per cent compared with the same quarter last year.
The results arrived days after SK Group and Nvidia announced a $500 billion-plus initiative covering AI data centres and next-generation memory development.
That still failed to calm the cocaine-nose jobs of Wall Street, who are worried that AI infrastructure spending, memory prices, and SK Hynix’s extraordinary growth cannot continue climbing forever.
Samsung Electronics and Japanese flash-memory maker Kioxia were also caught in the sell-off, although Samsung later reassured markets with record earnings and long-term data-centre supply agreements.
China supplied another reason for nervousness when memory maker CXMT made a spectacular Shanghai debut, briefly becoming the most valuable company listed in mainland China.
CXMT remains behind SK Hynix in advanced memory technology, but its rapid growth and Beijing’s support suggest the established memory cartel may eventually acquire another member.
SK Hynix’s order book, rising memory prices and HBM leadership suggest the boom is far from finished. The share fall says more about AI market expectations, where earning $64 billion in three months is disappointing because investors had already priced in ownership of the solar system.
