SK Hynix Earnings Boost Memory Stocks; SKHY Jumps Over 8% Pre-Market, SanDisk and Micron Gain Over 4%

TradingKey - U.S. memory sector stocks generally strengthened in pre-market trading on Wednesday, with SK Hynix (SKHY) rising as much as 8% at one point, SanDisk (SNDK) and Micron Technology (MU) both gaining over 4%, Silicon Motion (SIMO) rising nearly 4%, and Western Digital (WDC) advancing about 1%.

Source: TradingView

The market reaction was primarily driven by SK Hynix's latest earnings report and a massive shareholder return plan. Although the company's net profit missed expectations, its operating profit and revenue both significantly beat market estimates, demonstrating that its memory chip business continues to maintain strong growth momentum.

SK Hynix reported third-quarter results showing an operating profit of 83.33 trillion Korean won, a surging year-on-year increase of about sevenfold that topped the market expectation of 76.27 trillion won. Revenue came in at 104.62 trillion won, also surpassing analysts' estimate of 97.34 trillion won. Operating profit and revenue beat expectations by roughly 9% and 7%, respectively, reflecting that AI-related memory demand provided crucial support to the company's performance.

However, net profit presented a contrast to other metrics. SK Hynix's third-quarter net profit was 39.53 trillion won, well below the market consensus of 60.73 trillion won, marking the main surprise in this earnings report. Nevertheless, investors remained focused on the beat in revenue and operating profit, as well as the company's subsequent operations and capital return plans.

Beyond earnings results, the shareholder return plan announced by SK Hynix also served as a key catalyst driving the stock price up. The company plans to return approximately 100 trillion won (around $75 billion) to shareholders in fiscal year 2026. This includes over 30 trillion won in cash dividends, as well as over 60 trillion won designated for share repurchases and cancellations. Simultaneously, the company announced an additional 20 trillion won buyback plan, with about half of the shares to be cancelled following repurchase to further enhance shareholder returns.

Regarding quarterly dividends, SK Hynix announced a dividend of 20,000 won per share, which includes a special dividend of 10,000 won per share derived from gains on its investment in Japan's Kioxia. The sizeable dividend and buyback program are expected to bolster investor confidence in the company's cash return capability, providing additional support for the stock price.

SK Hynix's earnings report also signaled positive momentum for the broader memory industry. Concurrent growth in demand for HBM4, server DRAM, and enterprise SSDs indicates that memory demand driven by AI data center construction has not cooled noticeably. Meanwhile, the company expects the supply deficit to persist and will continue expanding advanced process nodes and HBM capacity, boosting market expectations for the earnings and product pricing of Micron, SanDisk, Western Digital, and other memory manufacturers.