Summary
KB Securities has lifted its target price for SK Hynix to 3 million Korean won and retained a Buy recommendation, a revision that points to a market capitalisation in the vicinity of $1 trillion. The broker’s move is based on sharply higher price forecasts for DRAM and NAND memory and on upgraded operating profit estimates for the second quarter and the year.
Valuation and market position
As of May 16, SK Hynix Inc (KS:000660) carried a market capitalisation of 1.276 trillion won, equivalent to $852 billion. With KB Securities’ new target, the memory chipmaker would become only the second South Korean company to approach a $1 trillion valuation, following rival Samsung Electronics Co Ltd (KS:005930).
The broker sustained its Buy rating while lifting operating profit projections for both the second quarter and the full year, reflecting a more optimistic earnings outlook tied to the memory cycle.
Drivers behind the upgrade
KB Securities attributed the target-price increase to much higher expected average selling prices for memory products. The broker projected that average selling prices for DRAM and NAND would climb by 194 percent and 244 percent respectively in 2026, driven by strong demand from artificial intelligence data centres.
According to the broker’s estimates, AI operators are responsible for roughly 70 percent of total memory shipments. That concentration of demand has been a major factor in the recent run-up in memory pricing, benefiting both SK Hynix and Samsung during the past year.
Supply dynamics and contract structure
KB Securities described the market as entering a de facto zero-supply era, noting that no new memory production lines are expected to come online before 2027. The firm also highlighted the growing prevalence of long-term supply contracts that extend through 2028 to 2030, saying these deals resemble a foundry model and may reduce earnings volatility while supporting a re-rating of the stock.
Commenting on usage trends, Kim said token usage at four major technology companies rose three times in six months and seven times year on year, as agentic AI applications increased memory consumption.
Relative margins and capital spending outlook
For 2026, KB Securities ranked SK Hynix first globally by operating margin at 78.1 percent, ahead of peers named in the broker’s comparison. The broker also forecast sizable increases in capital expenditure by major technology firms, projecting that capital spending by the four largest technology companies would rise 77 percent to $725 billion in 2026 and exceed $1 trillion in 2027.
The broker characterized AI investment as a survival requirement rather than a discretionary expense, concluding that demand for memory shows no foreseeable ceiling under current assumptions.
Bottom line
KB Securities’ upgraded target and profit revisions rest on steep projected price gains for DRAM and NAND, concentrated AI-driven demand for memory, limited near-term additions to capacity, and an evolving contract landscape that the broker says will reduce earnings volatility.