In early January, 24/7 Wall St. selected South Korean memory producer SK Hynix (000660.KS) as one of our top picks for an AI stock that could double in 2025.
We singled out the stock for two primary reasons: it was cheap, and we believed SK Hynix could continue seeing astonishing growth rates in 2025 and beyond.
How cheap was SK Hynix at the beginning of the year? The stock was trading for just 5.4X its next year’s estimated profits. Memory stocks often trade at cheaper multiples because the industry is extremely cyclical. A crash in the price of memory could quickly depress SK Hynix’s earnings.
However, we argued that memory was becoming a critical bottleneck in the growth of large AI data centers being built across the world. Rather than SK Hynix trading near a cyclical peak, the stock was at the beginning of a ‘super cycle’ of memory demand caused by the growth of artificial intelligence.
So far in 2025, our prediction is proving very prescient. SK Hynix shares have soared by 96% so far this year.
In this article, we’ll examine SK Hynix’s 2025 performance and whether the stock is still attractive after its 96% surge. In addition, we’ll offer another international stock idea whose shares are down so far in 2025, but could rally on new developments in the memory space.
Why Share of SK Hynix is Up 96% in 2025
2024 was a banner year for SK Hynix. After posting a loss of $9.40 per share in 2023, the company posted earnings of $20.09. SK Hynix has built on this success in 2025, and is now expected to post earnings of $31.80 this year. That means that after the company’s 96% gain so far in 2025, it’s still trading for just 7.8X this year’s estimated earnings.
The growth of artificial intelligence continues to be the driving force behind these gains. AI has boosted demand across the memory space, but the most red-hot sector is ‘high-bandwidth memory,’ or HBM.
HBM is a new type of stacked memory that sits directly on top of the processor. It’s extremely high performance, which adds complexity and cost.
There are only three companies competing to produce high-bandwidth memory at scale: SK Hynix, Samsung (005930.KS), and Micron (NYSE: MU | MU Price Prediction). Traditionally, Samsung has had the highest market share across memory products. However, the company has struggled to produce HBM at scale.
The biggest beneficiary of Samsung’s struggles has been SK Hynix. Counterpoint Research estimated that in Q2 2o25 SK Hynix had 62% HBM market share followed by Micron at 21% and Samsung at 17%.
Will SK Hynix Continue to Outperform Its Rivals in 2026?
Recent announcements point to SK Hynix’s dominance continuing throughout 2026 as well.
The company announced in early September that it had completed development on the next generation of HBM technology (HBM4) and is ready for mass production. On Micron’s recent conference call, the company said it expected mass production of HBM4 products to begin in the second half of 2026.
Samsung is the wild card in this battle. The company has the resources to compete with SK Hynix, but was slow to shift its attention to the HBM market. That’s caused Samsung to persistently be behind both SK Hynix and Micron. For example, the company’s prior generation HBM3E product still hasn’t passed the necessary qualifications to be used in NVIDIA‘s (Nasdaq: NVDA) products.
Samsung is attempting to race its HBM4 products through design and into production to close this gap. Wall Street researcher Jefferies reported in late August that Samsung was shipping HBM4 samples to NVIDIA and could begin HBM production ‘by the end of the year.’
Other researchers haven’t been as optimistic, with UBS projecting Samsung is unlikely to produce HBM4 wafers before Jan-Feb 2026. Of course, taking chips from design to mass production involves many complications that can cause this time frame to slip fruther into the future. Given Samsung’s past history of overpromising and underdelivering in the HBM space, it’s a reasonable assumption that their HBM4 products will be delayed.
Is SK Hynix Still Attractively Priced Today?
As we noted earlier, even with its 96% gain so far in 2025, SK Hynix still trades for just 7.8X this year’s estimated earnings. Wall Street forecasts another 20% of earnings growth in 2026. That means SK Hynix is currently trading for just 6.5X forward earnings.
Its primary customers – who are also seeing red-hot demand for their products – trade for significantly higher P/E multiples. For example, NVIDIA trades for 28X forward earnings while Broadcom (Nasdaq: AVGO) trades for 36X forward earnings.
Before adding shares of SK Hynix, there are three primary risk factors every investor needs to know:
- DRAM Pricing Cycles: The growth of HBM has helped companies like SK Hynix in multiple ways. New capacity shifting to HBM has meant little new supply for older memory technologies. This has meant higher prices across the board on all memory products. DDR4 (a technology more than 8 years old) has seen spot prices jump by more than fivefold this year! Memory pricing is historically very volatile, and this situation could quickly reverse.
- New Competition: Beyond the threat of Samsung catching up in HBM, there are new entrants attempting to break into memory. While the memory market today has just three main companies (Samsung, Micron, SK Hynix), a Chinese company named CXMT is aiming to create a domestic supply of HBM. If CXMT becomes a preferred domestic supplier for Chinese companies, it will lead to downward pricing pressure across memory products. Today, CXMT is small, but Counterpoint Research estimates its DRAM market share will rise from 6% in Q1 this year to 8% by Q4.
- AI Technology Changes: The need for more high-bandwidth memory in AI systems from NVIDIA and Broadcom is driven by AI models that continue to grow in size. Simply put, the larger AI models are, the more need for memory. Yet, there have been technical innovations (such as in the now-famous paper from DeepSeek) that cut down memory needs. Another risk would be that spending on AI dries up or takes a pause, in which case memory prices would quickly collapse.
At the end of the day, if you’re considering purchasing SK Hynix, it’s critical to remember that memory is a cyclical industry.
SK Hynix’s CEO told Reuters in August he believes the HBM market will grow by an annualized rate through 2030. If that prediction is even close to accurate, it’s almost certain that SK Hynix will dramatically outperform market returns.
Overall, we still believe SK Hynix is attractive even after its 96% gains in 2025. The company started the year trading for 5.4X forward earnings, and thanks to continued strong earnings growth, that multiple is still just 6.5X today.
If you’re interested in getting exposure to the growth of the high-bandwidth memory market, but want to avoid investing directly in a memory stock, we’d recommend looking at shares of BE Semiconductor (BESI.AS) as an alternative.
The company manufactures hybrid bonding technology that will increase in importance with future generations of high-bandwidth memory. That is to say, while SK Hynix has already seen an inflection in revenue thanks to the growth of high-bandwidth memory, BE Semiconductor’s growth could just be beginning.
Despite this anticipated ramp in revenues, shares of BE Semi are down 5% year-to-date while many other leading AI stocks have seen strong returns.
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