Key facts
- SK Hynix reported a 557% year-on-year surge in operating profit for Q2.
- The company's Q2 operating profit of 60.5 trillion won ($41.7 billion) missed the forecast of 64 trillion won.
- SK Hynix shares fell as much as 20% on Wednesday.
- The decline contributed to a broader sell-off in Asian equity markets, impacting chipmakers like Samsung Electronics.
- Analysts expressed concerns about the sustainability of AI spending and potential market bubbles.
- Apple's stock briefly surpassed a $5tn valuation.
- South Korea's finance minister is reviewing market stabilization measures.
SK Hynix Inc., a leading South Korean memory-chip maker, saw its shares plunge as much as 20% on Wednesday after its record second-quarter profit failed to meet market expectations. The company announced a 557% year-on-year surge in operating profit for the quarter ending June 30, driven by high demand for its advanced memory chips used in artificial intelligence data centers. However, the reported 60.5 trillion won ($41.7 billion) fell short of the average forecast of 64 trillion won.
The disappointing results exacerbated a broader sell-off in Asian equity markets, particularly impacting chipmakers. Rival Samsung Electronics also experienced a significant share price decline. Analysts suggested that while SK Hynix's earnings were strong, they were insufficient to sustain the current AI market momentum, raising concerns about the longevity of AI spending and the potential for market bubbles.
In contrast to the tech sell-off, Apple's stock briefly surpassed a $5tn valuation, as investors sought perceived safe-haven assets. Meanwhile, South Korea's finance minister indicated that the government is reviewing market stabilization measures amid the market turmoil.