Memory stocks went through an actual bloodbath in mid-October. A Chinese chipmaker claimed a design breakthrough, artificial intelligence (AI) bubble fears flared up again, and investors yanked more than $480 million out of a memory-focused exchange-traded fund (ETF) in a single day, the largest one-day outflow on record for that fund. The combined market value of the biggest memory makers dropped by more than $700 billion in a matter of days.
As of this writing, shares of SK Hynix (NASDAQ: SKHY) alone fell roughly 20% this month. But the memory chip company also just posted the best quarter in its history. That whiplash tells you almost everything you need to know about this stock right now: The panic was about sentiment, and the earnings were about reality.
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What’s going on in this sell-off?
One of the triggers was a Chinese company’s claim that it had made a major advance in memory chip design, which spooked investors and prompted questions about whether the AI memory boom was overbuilt. Add in broader worries about whether all the money pouring into AI data centers will actually pay off, and you had a classic fear-driven dump.
One analyst called it a reaction to financing anxiety rather than a traditional memory-cycle slowdown, per the Benzinga news site. That distinction matters. Nothing about SK Hynix’s actual business changed during this month. Its order book didn’t shrink. Its factories didn’t go idle. The stock price just got repriced for a worst case that hadn’t happened yet.
What SK Hynix is doing
Then came the numbers. Late this month, SK Hynix reported revenue of 104.6 trillion South Korean won ($78 billion) for the third quarter, its first quarter ever above the 100 trillion won ($75 billion) mark, up 328% from a year earlier, with an operating margin around 80%, higher than Nvidia‘s. The stock jumped more than 10% on the news. The engine behind all of it is HBM, the high-bandwidth memory that sits next to AI chips and feeds them data fast enough to keep up with the processing.
SK Hynix’s newest version, HBM4, entered mass production and began shipping in Q3, and management expects it to outsell the prior generation, HBM3E, by Q4. The company also told investors that its DRAM and HBM output is essentially sold out through 2029, with tight supply expected to persist through 2030. That’s not marketing talk, that’s a company telling Wall Street it can’t make enough of the product fast enough, which is about as good a problem as a chipmaker can have.
