With Over $750 Billion in Planned AI Investments in 2026, What's Going on With SK Hynix Stock?

Parkev Tatevosian, CFA•Jul 24, 2026

Summary

Parkev provides an in-depth analysis of the semiconductor industry's shift toward memory and storage as the primary beneficiaries of the AI infrastructure build-out. With hyperscalers like Alphabet, Amazon, and Microsoft set to spend over $750 billion on capital expenditures, the demand for High Bandwidth Memory (HBM) and Solid State Drives (SSD) has caused prices to soar, with some components seeing triple-digit price increases. Parkev highlights that this is a structural shift rather than a temporary supply imbalance, as the transition to 'agentic AI' requires more complex processing that relies heavily on memory and storage capacity.

Parkev notes that while the data center market is thriving, the PC and smartphone markets are suffering from these higher component costs, leading to potential unit sales declines in those sectors. Despite the historical 'boom and bust' cycles of the semiconductor industry, Parkev points out that management teams at leading firms believe this cycle will last longer due to the replacement cycle of AI data centers and the high return on investment for customers. Parkev expects continued capital expenditure increases from major tech firms to cover these rising component costs.

SK Hynix: Parkev highlights that the company achieved a record 72% operating profit margin due to soaring prices for HBM and DRAM. The company's revenue grew nearly 200% year-over-year as it prioritizes high-margin products for AI data centers. Parkev also notes that SK Hynix is developing 1C nanometer technology to stay ahead in the competitive memory market.

Micron (MU): Parkev points out that Micron's revenue more than quadrupled compared to the same quarter last year, reaching an incredible 80% operating profit margin. This performance reflects the massive pricing power manufacturers currently hold over hyperscalers who are desperate for storage and memory components. Parkev observes that Micron is benefiting from the same structural shifts in the AI market that are propelling SK Hynix.

Nvidia (NVDA): Parkev mentions that while Nvidia dominated the initial GPU-focused phase of the AI boom, its stock has recently stagnated as investor interest shifts toward memory and storage. He notes that Nvidia previously set the bar with 60% margins, but is now being eclipsed by the profit margins of memory suppliers. Parkev suggests that the rise of agentic AI makes components like CPU and memory increasingly vital compared to just the GPU.

Mentioned Stocks

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev notes that Micron's revenue more than quadrupled and it achieved an 80% operating profit margin. Parkev views the shortage in DRAM and NAND as a significant tailwind that allows Micron to prioritize the highest profit margin products.

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NVDA

Sentiment: HOLD

Reasoning: Parkev points out that Nvidia's stock has stagnated recently compared to memory stocks. While Nvidia is a leader, Parkev suggests the current phase of the AI boom is favoring memory and storage components more than just GPUs due to the requirements of agentic AI.

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SK HYNIX

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev is highly bullish on SK Hynix due to its 72% operating profit margins and its lead in the HBM market. Parkev highlights the structural shift toward agentic AI which increases memory demand and believes the pricing strength will last longer than previous cycles.

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