Shares of SK Hynix, a key supplier of high-bandwidth memory chips to NVIDIA Corp, experienced a significant decline of over 6% on the South Korean exchange after being downgraded by Morgan Stanley. The brokerage firm lowered SK Hynix’s target price from 260,000 won to 120,000 won, citing a lack of preference for the stock among global memory makers. This downgrade has led to a drop in the stock’s value, reaching its lowest level since February 19.
Morgan Stanley analysts Shawn Kim and Duan Liu expressed concerns about the deteriorating memory conditions and the challenges SK Hynix may face in terms of revenue growth and margins as the industry moves past late-cycle conditions. As a result, investors have shown less interest in the stock, favoring quality in Samsung and value-oriented end markets.
In contrast to Morgan Stanley’s downgrade, other financial institutions had previously raised their predictions for SK Hynix’s stock price. Goldman Sachs Group Inc. had set a target of 290,000 won, while Citigroup Inc. predicted a price of 350,000 won. SK Hynix’s parent company, SK Group, has also made a significant commitment to invest 80 trillion won ($56 billion) by 2026 in artificial intelligence and semiconductors, particularly in high-bandwidth memory chips, data centers, and personalized AI assistant services. This strategic move aims to strengthen the company’s supply chains for emerging technologies and solidify its position as a leading supplier to NVIDIA.
The ongoing AI boom has put both Samsung and SK Hynix in the spotlight, with industry experts debating which company is the better investment in this AI-driven market.
SK Hynix’s stock is currently trading at 151,800 won, reflecting a decline of 6.76% on Thursday. However, it has gained 6.60% year-to-date, according to data from Benzinga Pro.