SK Hynix Stock Is Undervalued, CFO Says, as AI Memory Profits Surge

SK hynix Inc.‘s (NASDAQ:SKHY) chief financial officer says the company’s stock is undervalued, even after the AI memory boom delivered record quarterly revenue and operating profit. The South Korean chipmaker is pairing that assessment with an approximately 100 trillion won ($74.7 billion) shareholder-return plan for 2026, betting that dividends and share cancellations can help investors recognize the earnings and cash flow generated by its memory business.

SK Hynix CFO Says Stock Undervalues Earnings

"We believe our share price today is undervalued, not adequately reflecting our earnings and cash flow," CFO Kim Woo-hyun said during the company’s third-quarter earnings call.

Kim said SK Hynix had allocated shareholder returns beyond cash dividends to share repurchases and cancellations, which reduce the number of shares outstanding and can increase value per share. The board will determine quarterly repurchase amounts by considering the share price, valuation and cash flow, he said.

The comments came as SK Hynix reported revenue of 104.6 trillion won ($78.1 billion) in the third quarter, up 32% from the previous quarter and 328% year over year, according to the company’s earnings release. Operating profit climbed 38% sequentially and 632% from a year earlier to 83.3 trillion won ($62.2 billion), lifting the operating margin to 80%. The company cautioned that its reported results were preliminary and remained subject to external auditor review.

SK Hynix’s $75 Billion Shareholder Return

SK Hynix plans to return approximately 100 trillion won ($74.7 billion) to shareholders during 2026, including at least 30 trillion won ($22.4 billion) in cash dividends and more than 60 trillion won ($44.8 billion) in share acquisitions and cancellations. The total includes a 40 trillion won ($29.9 billion) repurchase program announced in August, which the company said it completed last week and plans to cancel shortly.

For the third quarter, the board approved a 14 trillion won $10.5 billion) cash dividend and a 20 trillion won ($14.9 billion) share acquisition. Of the planned share purchase, 10 trillion won ($7.5 billion) is intended for shareholder returns and will be canceled; the other 10 trillion won ($7.5 billion) is earmarked for employee compensation and is excluded from the shareholder-return total. The dividend is 20,000 won (about $14.94) per share, including a special dividend tied to gains from SK Hynix’s investment in Kioxia.

AI Memory Demand Fuels Profits

The results reflect tight supply and rising prices for AI memory, including high-bandwidth memory (HBM), server DRAM and enterprise solid-state drives. SK Hynix said HBM4 shipments began in earnest in the third quarter and expects HBM4 to overtake HBM3E in both shipment volume and revenue in the fourth quarter.

The company also said DRAM and HBM volumes through 2029 are effectively sold out when existing long-term agreements and customer demand under discussion are considered together. That is not the same as saying every unit is already contractually committed, but it gives investors a view into the demand visibility underpinning management’s confidence.

For investors, the tension is clear: SK Hynix is generating extraordinary profits from AI-driven memory demand, while its CFO argues the stock does not fully reflect that performance. The scale and execution of its shareholder-return plan may become an important test of whether cash generation translates into higher per-share value.

Note: Quotes from CFO Kim Woo-hyun’s responses during the Q&A session have been translated from Korean into English.

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