SK Hynix soars 28%, Samsung 25%, but here's why this rebound may not last

Samsung Electronics stock surged 25% on Friday, while SK Hynix climbed nearly 28%, powering a rebound in South Korea’s stock market.

The KOSPI jumped more than 16% and triggered a trading halt after losing roughly 17% over the previous three sessions.

The reversal followed US technology earnings, easing fears about the durability of artificial-intelligence investment.

Yet the scale of the move also reflected short covering and a reversal of panic positioning.

Microsoft and Amazon restored confidence in data-centre demand, but did not eliminate concerns about valuations, Chinese competition, or slowing memory price growth.

Big Tech earnings trigger a violent relief rally

The immediate catalyst came from the United States rather than a sudden change at Samsung or SK Hynix.

Microsoft forecast Azure growth, while Amazon reported its fastest AWS expansion in more than four years and raised capital-spending plans.

Those results reassured investors that hyperscalers remain willing to fund data centres requiring high-bandwidth memory, server DRAM and storage.

The Philadelphia Semiconductor Index rose more than 8% on Thursday, encouraging buyers to return to Asian chip stocks.

“Both the earnings as well as the sentiment are kind of coming back,” IG market analyst Fabien Yip told Reuters.

He said the AI demand story still appeared sustainable and suggested the earlier selloff may have overreacted to concerns surrounding capital expenditure.

Fundamentals also remain supportive. Samsung has reported record quarterly profit and expects HBM4 revenue to more than triple in the third quarter.

SK Hynix continues to benefit from tight advanced-memory supply and long-term customer agreements.

Memory profits remain strong, but expectations are dangerous

The recovery does not settle whether Korean memory shares had become excessively valued before the crash.

Even record earnings disappointed investors this week because expectations had moved faster than reported profits.

Kiwoom Securities analyst Park Yu-ak cut Samsung’s target to 390,000 won from 430,000 won on July 8.

He warned that component inflation and more cautious electronics customers could slow memory purchases, increasing volatility as second-half earnings growth moderates.

Morningstar equity analyst Jing Jie Yu offers a more balanced view.

She expects the current memory upcycle to remain substantially stronger than previously forecast, supported by tight supply, AI demand and longer customer contracts.

Morningstar nevertheless expects heavy investment to increase capacity during the next two years, contributing to another downturn around 2029 and 2030.

Chinese manufacturers remain an additional risk if they narrow the technology gap and add lower-priced conventional DRAM supply.

Leverage could turn the comeback into another whipsaw

Market structure may create the immediate threat.

Leveraged products linked to Samsung and SK Hynix magnified the rally earlier this year, but accelerated losses when prices reversed and investors were forced to reduce exposure.

South Korean and Hong Kong regulators have tightened controls after extreme volatility.

CSOP Asset Management will introduce flexible leverage on products tracking the two chipmakers, while Korean authorities are considering stricter limits on retail exposure.

Friday’s surge may have corrected an excessively pessimistic market, but it does not confirm a durable bottom.

Samsung and SK Hynix still have powerful AI-driven earnings stories, yet a rally fuelled partly by short covering and leveraged positioning can reverse quickly.