Why SK Hynix Stock Skyrocketed This Week
Key Points
Singapore's sovereign wealth fund is investing in SK Hynix.
Counterpoint Research's latest report on the NAND memory market bodes well for SK Hynix.
- 10 stocks we like better than SK Hynix ›
SK Hynix (NASDAQ: SKHY) stock enjoyed a strong rally this week, with its share price rising 20.6% across the stretch. The S&P 500 rose 1.2% over the period, and the Nasdaq Composite gained 1.7%.
SK Hynix's share price moved higher due to news that Singapore's sovereign wealth fund was poised to invest in the company and a new market share report from Counterpoint Research. Bullish momentum for the broader South Korean stock market also helped to lift the stock.
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Singapore plans to invest in SK Hynix
News hit on Wednesday that Singapore's Temasek wealth fund will be investing in SK Hynix and Samsung. Both companies are leading players in the memory chip market, and the vote of confidence from Singapore's sovereign fund helped power substantial rallies for each stock.
Valuations for South Korean chip stocks and the country's stock market at large have been volatile recently, but momentum turned bullish this week. Samsung and SK Hynix are South Korea's two largest companies by market capitalization and have a huge impact on valuation directionality for the broader market, and both stocks can also see pricing moves compounded by the sentiment shifts they help to shape.
A recent report bodes well for SK Hynix
Counterpoint Research published its latest market share report on the NAND memory market this week, and investors saw it as a positive indicator for SK Hynix. While the company's market share of 22% in Q2 still put it behind Samsung's market share of 25%, the firm said that SK Hynix was benefiting from its rival's supply constraints. Counterpoint also highlighted strong growth for the company's Solidigm subsidiary.
SK Hynix stock has been highly volatile over the last month and could continue to see big swings, but the demand outlook in the memory chip market continues to look very strong.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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