SK Hynix Inc. (SK Hynix (SKHY)) shares slid about 3% in Thursday's premarket session, continuing a rough stretch for memory-chip stocks even as broader markets pointed higher. Nasdaq futures were up 0.57% and S&P 500 futures gained 0.36%, but SK Hynix couldn't catch the bid.
The stock has been under pressure as traders reassess the semiconductor rally that saw the SOXX index double in about three months before falling roughly 25% from its peak. But analysts see reasons to stay bullish on memory names like SK Hynix, even if the easy gains are behind us.
Supply Limits Support Memory Stocks
Wolfe Research senior analyst Chris Caso told CNBC on Wednesday that the recent semiconductor pullback is more about resetting expectations after a sharp rally than a fundamental breakdown. He said memory suppliers remain severely supply constrained because they simply can't ramp up output quickly enough to meet demand.
Caso noted that the industry lacks the physical space to produce all the semiconductors customers want. Any potential oversupply cycle, he said, likely won't emerge before 2028 at the earliest — new capacity requires new buildings, and those take time to complete. That supports Wolfe's bullish view on the group.
Analyst Says 'Easy Money' Has Already Been Made
Susquehanna senior equity research analyst Mehdi Hosseini told CNBC on Tuesday that investors should stay patient with memory stocks after the pullback. He said the next phase depends on whether commodity memory prices can hold steady or roll over like they have in past cycles.
Hosseini acknowledged that the "easy money" in memory stocks has largely been made, but he remains constructive on the industry's longer-term outlook. For investors without exposure, he recommended waiting rather than chasing recent weakness. "I think you're going to have better pricing over the next month or two," he said, adding that investors typically return to the memory sector in late summer.
While memory stocks have surrendered a significant portion of their recent gains over the past month, Hosseini noted they continue to outperform levels seen three months ago. The comments come after a volatile month for memory-chip makers, including Micron, as investors reassess whether pricing gains fueled by artificial intelligence demand can continue.
SK Hynix Price Action
SK Hynix shares were down 2.97% at $123.02 during premarket trading on Thursday, according to market data.
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