Macquarie has raised its valuation on SK Hynix, increasing the price target by 61% to 2,900,000 Korean won while retaining an Outperform rating on the stock. The brokerage's analysts said the move reflects a view that a worsening memory shortage will persist well past 2027 and that an upcoming rise in high-bandwidth memory (HBM) prices could significantly enhance the chipmaker's profitability.
The analysts, Daniel Kim and Jacob Kim, set the new target on a 6x multiple of 2027 earnings per share (EPS) and argued that 2027 provides clearer visibility into the company's earnings power than 2026. SK Hynix's shares closed at 1,970,000 won on Thursday.
Supply constraints and HBM dynamics
Macquarie's bullish thesis rests on several supply- and demand-side dynamics in the memory market. On the supply side, the bank expects DRAM bit-supply growth to remain limited - capped at roughly 20% in 2028. The restraint is attributed to slowing die yield improvements at advanced process nodes and the fact that next-generation HBM chips will consume a growing share of wafer capacity.
On the demand side, the analysts point to the spread of agentic AI applications as a catalyst that will lift token-related workloads and drive token demand sharply higher, a trend they say should keep memory prices elevated.
Macquarie notes that when annual contracts for 2026 HBM were negotiated in October 2025, commodity DRAM prices were only a fraction of today's levels, which left HBM profit margins materially below those of standard DRAM. The bank expects that in 2027 annual HBM contracts AI chip companies "will have little choice but to accept a material price increase," which Macquarie estimates could exceed 50%. The analysts said such a price move would be important both for HBM buyers - to avoid a repeat of the 2026 supply shortfall - and for SK Hynix to bring profit levels for HBM closer to those for DRAM.
Long-term contracts and customer behavior
Macquarie also flags a structural demand signal embedded in long-term supply agreements (LTAs). The bank reports that a range of memory buyers - both large and small - are reportedly willing to enter five-year supply contracts. Macquarie interprets this willingness as an indication that customers do not expect supply conditions to materially improve from 2028.
Against that backdrop, SK Hynix is seen as being in a selective position to negotiate favorable terms. Macquarie suggests that over time the company could commit 30% to 50% of annual volumes to such LTAs, potentially locking in higher-value sales.
Capital returns, ADR plans and market structure effects
Another factor highlighted by the analysts is SK Hynix's plan for an American depositary receipt (ADR) listing in the United States. Macquarie expects the company to deploy roughly 250 trillion won on share buybacks and cancellations over the next two years while gradually increasing the ADR float to more than 15% of shares outstanding.
The analysts argue that this combination of buybacks and an expanding ADR presence should reduce the domestic free float and attract passive inflows from U.S. investors, which in turn could provide additional support for the share price.
Conclusion
Macquarie's revised valuation and continued Outperform rating are underpinned by an assumption of prolonged supply tightness, sharper HBM pricing tied to rising AI-driven token demand, structural signals from long-term contracts, and corporate actions that could tighten available domestic supply while broadening foreign investor participation. The bank's target reflects a forward-looking focus on 2027 earnings as the clearest indicator of SK Hynix's earnings power under these conditions.