SK Hynix Shares Surge. Why It's Not Too Late to Buy the Stock.

SK Hynix (SKHY) posted record Q3 results, with revenue up 328% year-over-year and operating margins expanding to 80%, according to The Motley Fool's coverage. Soaring memory prices drove the surge.

The demand picture is what matters for positioning. HBM and DRAM volumes are sold out through 2029. SK Hynix holds 50% of the HBM market and serves as lead supplier to NVDA, tying SKHY's order book directly to NVDA's AI buildout. Despite the recent rally, the stock trades at a forward P/E of 4.5x.

Capital return adds a second leg to the bull case. The company announced a $14.9 billion buyback and a $10.4 billion dividend, and plans to return 50% of cumulative free cash flow to shareholders through 2027.

Interpretation: a 4.5x forward multiple suggests the market is pricing memory pricing as a cyclical peak rather than a durable regime. The multi-year sell-out and the 50% free cash flow payout argue against that framing, though the thesis rests on memory prices holding.