TLDR
- SK Hynix ADR fell 6.3% to $141.50, dragged down by weak forward guidance from SanDisk
- Korean-listed shares dropped nearly 10% overnight with heavy foreign selling
- Western Digital also tumbled after-hours despite beating earnings estimates
- Subsidiary Solidigm launched a pre-IPO fundraising round targeting up to $7 billion
- J.P. Morgan says the Asia tech sell-off has not derailed the AI investment cycle
SK Hynix’s U.S.-listed ADR dropped 6.3% in morning trading on Thursday, hitting $141.50.
The selloff was triggered after SanDisk reported earnings Wednesday evening. SanDisk beat both revenue and profit estimates, but its forward guidance came in below analyst expectations at the midpoint.
That was enough to spook the memory sector.
Western Digital reported the same night and also beat estimates, yet its stock still tumbled in after-hours trading. The back-to-back reactions pointed to a market worried that the memory upcycle is losing steam faster than expected.
The damage in Seoul was worse. SK Hynix’s Korean-listed shares fell roughly 10%, driven by heavy foreign selling. The stock briefly hit South Korea’s 30% daily limit-down threshold on the Nextrade alternative premarket system, though only 11 shares changed hands in that session. Critics have pointed to the thinly traded venue as a source of misleading price signals.
Solidigm IPO Adds to Investor Unease
On top of the guidance-driven pressure, reports surfaced that Solidigm, SK Hynix’s wholly owned NAND subsidiary, has formally kicked off a pre-IPO fundraising process. The round is targeting up to $7 billion ahead of a planned Nasdaq listing.
The news raised dilution concerns among SK Hynix shareholders. The company later clarified that no final decision had been made.
Micron also traded lower in pre-market, confirming the selloff was spreading across the memory space. The Nasdaq Composite was essentially flat on the day, and the S&P 500 was barely positive, making clear this was a sector-specific move rather than a broader market pullback.
Analysts Stay Bullish Long Term
Despite Thursday’s drop, Wall Street’s overall view on SK Hynix remains positive. Multiple firms hold buy ratings with price targets well above current levels.
The key argument: SK Hynix dominates the high-bandwidth memory market, and supply is expected to remain tight through 2027.
J.P. Morgan said in a Wednesday note that the Asia tech sell-off had not derailed the AI investment cycle. The bank does not expect major cloud and AI companies to pull back on capital spending.
“Stepping away from the share price moves, we do not see any fundamental indicators that signal meaningful weakness in the next 6-12 months,” J.P. Morgan said.
S&P Global added that the global tech equipment purchasing managers’ index rose in July at its fastest pace since May 2021.
SKHY is now trading well below its 52-week high of $194.80 but remains above its 52-week low of $124.80.
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