SK Hynix stock jumps 11% after historic rout: is the worst now over?

SK Hynix stock jumped 11% in Seoul on Wednesday, extending a rapid rebound from the worst single-day decline in the chipmaker’s history.

The recovery follows extraordinary whiplash around its Nasdaq listing.

SK Hynix’s American depositary receipts gained 12.8% in their Friday debut, before the Korean shares crashed 15.4% on Monday as investors locked in profits.

A tentative 3.7% recovery on Tuesday was followed by Wednesday’s stronger advance, suggesting some investors believe the recent rout went too far.

SK Hynix stock: From record crash to sharp comeback

SK Hynix’s ADRs were priced at $149, opened at $170 and closed their first Nasdaq session at $168.01.

The blockbuster listing raised about $26.5 billion, setting a record for a US share sale by a foreign company.

That enthusiasm quickly collided with profit-taking, leveraged positioning and a wider sell-off in South Korean stocks.

Monday’s decline helped drag the Kospi down about 9%, triggering a temporary market-wide trading halt.

Leveraged funds linked to SK Hynix amplified the reversal as investors rushed to cut exposure.

The mood improved after softer US inflation data revived demand for technology shares.

SK Hynix rose as much as 13% on Wednesday before trimming the gain, while Samsung Electronics advanced about 6%.

Hanmi Semiconductor, a supplier of chip-packaging equipment, surged roughly 25% in early trade.

The rebound also followed a strong US session for memory stocks.

SK Hynix’s ADRs soared almost 28% on Tuesday after Barclays began coverage with an Overweight rating and a $330 target.

Micron and other semiconductor names also advanced, reinforcing the view that Monday’s rout was driven in part by positioning rather than by a sudden deterioration in AI demand.

Why analysts say the selling was overdone

Phillip Wool, chief research officer at Rayliant Global Advisors, told CNBC that the weakness in Asian AI hardware stocks was “mostly risk management”.

Investors had built unusually large positions in South Korean and Taiwanese chipmakers following their exceptional rallies, Wool said.

Reducing those holdings represented prudent portfolio rebalancing rather than a loss of enthusiasm for AI infrastructure.

Daniel Yoo, global strategist at Yuanta Securities, told CNBC’s Squawk Box Asia that investors were still trying to determine the appropriate valuation after the ADR issuance created a new US benchmark for SK Hynix.

The additional supply and the unusually large premium between the ADRs and Korean shares have contributed to short-term volatility.

UBS has retained a Buy rating and raised its Korean-share price target to 3.2 million won.

The bank expects operating profit of 327 trillion won in 2026, roughly 27% above market consensus, supported by HBM4 shipments, longer-term customer agreements and potential shareholder returns following the US listing.

Not everyone is convinced the rally has legs

The recovery does not erase the risks created by SK Hynix’s remarkable run.

Even after the correction, the Korean shares remain several times higher than they were a year ago, an unusual performance for an industry historically defined by sharp cycles of shortage and oversupply.

Investment writer Edward Sheldon argued in a bear-case analysis published by Themes ETFs that investors may be underestimating memory cyclicality, rising competition and SK Hynix’s dependence on a small number of major AI customers.

Morningstar is similarly cautious. Analyst Lorraine Tan said the current memory upcycle was proving stronger than expected, but maintained that conditions would eventually normalise, limiting the potential upside at elevated prices.

The research firm valued the ADRs at $160 before their latest surge.