"SK Hynix Halved" Morgan Stanley Admits "We Were Wrong" After Surprise Earnings

Concerns Over Memory Chip Price Decline Lead to SK Hynix Target Price Adjustment from 260,000 to 120,000
Overall Outlook Remains Negative

Foreign investment bank Morgan Stanley, which had significantly lowered SK Hynix's target stock price, has released a report admitting that its short-term outlook was incorrect.

According to industry sources and foreign media on the 25th, Morgan Stanley stated in its SK Hynix earnings analysis report that "the short-term outlook for the stock was wrong. However, the view on the memory cycle peak is not incorrect."

As SK Hynix achieved record-high sales, operating profit, and net profit in the third quarter of 2024, driven by high-bandwidth memory and HBM effects, employees are leaving work on the 25th at SK Hynix headquarters in Icheon, Gyeonggi Province. Photo by Kang Jin-hyung

Earlier, in mid-last month, Morgan Stanley had sharply lowered SK Hynix's target price from 260,000 KRW to 120,000 KRW, citing the possibility of price declines in memory chips such as High Bandwidth Memory (HBM).

In this report, Morgan Stanley slightly raised the target price to 130,000 KRW but maintained its investment rating of 'underweight.'

SK Hynix posted an operating profit of 7.03 trillion KRW in the third quarter of this year, setting a record high, thanks to strong performance of HBM used in the artificial intelligence (AI) sector. This report is interpreted as being influenced by such favorable earnings.

However, Morgan Stanley still emphasized "caution is necessary" and maintained a negative stance on the overall outlook for SK Hynix.