"It has fallen from 3 million won to 650,000 won"... Analysts still see SK hynix at 4.2 million won

[Financial News] The stock price is recovering, but it still has a long way to go. Even so, brokerage houses continue to raise their target prices for SK hynix. On the 3rd, Kim Dong-won, an analyst at KB Securities, said, "Selling idle computing power by hyperscalers, or large-scale data center operators, is a representative example of monetizing artificial intelligence (AI) investment," adding, "Selling computing power can accelerate AI investment rather than slow it down."
Kim raised his target price for SK hynix, widely seen as a key beneficiary of AI investment, from 3.8 million won to 4.2 million won.
According to the Korea Exchange, as of 1:15 p.m. that day, SK hynix was trading at 2.335 million won, up 6.77% from the previous session. However, compared with the recent peak of 2.987 million won on the 25th of last month, there is still considerable room for recovery. 
This came in response to the previous day's market reaction, when news that Meta Platforms was expanding into the cloud business fueled profit-taking in semiconductor stocks. As investors focused on the fact that Meta had excess computing power to sell, concerns grew that the boom in memory semiconductors driven by AI investment competition could be nearing its peak. Samsung Electronics and SK hynix then plunged 9.06% and 14.57%, respectively, the day before.
Kim, however, countered those concerns by citing xAI, which began selling data center computing power before Meta did. He said, "xAI leased its Colossus 1 and 2 data centers to Anthropic and Google, respectively, and quickly recouped its investment costs." From the two companies, xAI receives annual lease payments of $26 billion. Kim described this as "a representative monetization case for an AI company."
Against this backdrop, the seven major U.S. Big Tech companies are expected to enter a profitable phase in their AI businesses in 2028 on a free cash flow to the firm (FCF) basis. That means they will have enough money to continue investing in AI infrastructure.
As a result, KB Securities expects the global AI investment market to grow from $800 billion this year to $1.1 trillion next year and $1.5 trillion in 2028. Kim said, "Since 2022, demand for memory semiconductors has increased 100-fold so far, and it is expected to rise another 100-fold over the next five years," adding, "The share of memory semiconductors in AI investment will surge from 14% in 2025 to 50% in 2027."
That analysis became the basis for upward revisions to SK hynix's earnings estimates. KB Securities raised its operating profit forecasts for SK hynix to 29 trillion won this year and 47.8 trillion won next year.
Kim said, "Next year's wafer production capacity for DRAM and NAND flash is expected to rise only 7% and 4%, respectively, from a year earlier, while demand is projected to increase 17% and 19%, respectively," adding, "The shortage of memory semiconductors will deepen further next year."

fair@fnnews.com Han Young-joon Reporter