SK Hynix Loses $470 Billion in Market Value in Just Over a Month as Earnings Test AI Trade

SK Hynix Inc. shares have slumped 38% from their record high in June, wiping out about $470 billion in market value in just over a month.

Bloomberg reported on July 27 that the drop from the June peak was the second-largest decline in market capitalization among listed companies worldwide over that period, trailing only SpaceX.

The selloff has been fueled by crowded positioning in AI-related stocks and volatility magnified by leveraged products. Investors are also weighing whether higher memory prices are raising costs for customers enough to curb usage or push them toward cheaper alternatives.

"The debate now is whether memory is taking too large a share of the overall pie," said Andy Wong, head of multi-asset at Pictet Asset Management. The issue is whether anything can alter the market view that SK Hynix is capturing excessive margins in the supply chain. Pictet has cut its SK Hynix holdings in recent weeks.

SK Hynix is due to report second-quarter earnings on July 29. Investors expect another record quarter, helped by rising memory prices driven by AI demand.

Even so, the focus is less on the earnings themselves than on the outlook for AI investment. Kim Min-ji, a portfolio manager at Must Asset Management, said the results alone are unlikely to be a major catalyst for the shares. More important, Kim said, will be whether the company steps up shareholder returns, including share buybacks, and whether large hyperscalers maintain capital expenditure.

The recent share-price correction has also driven down the valuation. SK Hynix trades at 4.4 times 12-month forward earnings, about half the level of a month ago and below Micron Technology Inc.'s 6.2 times.

James Ou-Yang, a market strategist at Tiger Brokers, said SK Hynix's earnings could serve as a test of global investor sentiment toward AI hardware. With expectations already elevated, even a slight miss could provoke a sharp stock reaction.