SK Hynix reported third-quarter financial results for its fiscal year ending in 2026, posting revenue of 104.6155 trillion won ($78 billion) and operating profit of 83.3338 trillion won ($63 billion). These figures represented a 32% and 38% increase, respectively, from the previous quarter, marking the first time the company surpassed 100 trillion won in quarterly revenue.
The company attributed the strong performance to a massive increase in sales of server DDR5 memory chips, alongside expanding NAND sales for SSDs and continued growth in higher-margin data center products. Jim Cramer noted that SK Hynix's blockbuster earnings suggested that artificial intelligence stocks could still rally despite skepticism regarding massive data center build-outs.
Cramer pointed to several factors contributing to the stock's strength, including its low valuation, which trades at just four times 2027 earnings. He highlighted that SK Hynix indicated its production was effectively sold out through 2029, supported by long-term customer agreements, demonstrating sustained demand for memory chips used in AI data centers.
SK Hynix stated that the growing adoption of generative AI, chatbots, and other technologies based on large language models is expected to drive further investment in infrastructure and additional memory products. The company added that it expects the memory market to sustain its growth, led in the short term by enterprise and personal AI, and over the mid-to-long term by physical AI such as autonomous driving and robotics.
Despite global backlash against data center projects, SK Hynix reported that new infrastructure projects are putting further pressure on manufacturers' ability to meet demand, leading the company to expect demand to exceed supply through 2030. The firm plans to accelerate the expansion of its manufacturing capacity by building new chip plants in its homeland and the US.
Jim Cramer suggested that the combination of low valuation, strong earnings, accelerating growth, sustained demand, and shareholder returns offered a blueprint for AI-related companies. He also noted that Micron trades at a low multiple and has similar long-term customer agreements, suggesting potential for the chipmaker to deploy its growing cash pile toward a significant buyback when CHIPS Act funding restrictions ease on Dec. 9.
