Stock market today: S&P 500 rides Apple-led tech rally to close higher
Investing.com-- SK Hynix Inc (KS:000660) shares fell sharply on Thursday after Goldman Sachs downgraded the stock on concerns that its earnings may be hit from growing competition in the advanced memory chip market.
SK Hynix fell nearly 9% to 270,000 won, driving a 0.5% decline in the KOSPI index.
Goldman Sachs downgraded the stock to Neutral from Buy, with a target price of 310,000 won.
The investment bank said that while the long-term growth potential for the high-bandwith memory chip market, which SK Hynix leads, remains positive, the company is likely to face increased competition from 2026.
Goldman Sachs sees HBM chips seeing price declines in 2026 due to oversupply, especially as SK Hynix’s competitors begin catching up with the firm’s technological advantage.
SK Hynix currently makes the most advanced HBM chips in the market, and supplies a bulk of these to Nvidia (NASDAQ:NVDA). HBM chips are a key component of the advanced processors used to run AI programs.
While strong demand for HBM and general purpose memory will drive up earnings in 2025, Goldman Sachs sees a weaker outlook for 2026, with HBM prices expected to fall by a “double-digit” percentage. This in turn is expected to dent SK Hynix’s margins.
Weakness in SK Hynix shares also came after chipmaking equipment giant ASML Holding NV (AS:ASML) warned on its 2026 projections, stating that uncertainty over U.S. trade tariffs was delaying investments in more chipmaking equipment. Still, the company clocked stronger-than-expected second-quarter bookings on robust AI-fuelled demand.
ASML acts as a bellwether for the chipmaking industry, given that it is the only maker of the advanced lithography equipment used to make chips.
ASML’s warning also came just a day before earnings from TSMC (NYSE:TSM), the world’s biggest contract chipmaker and another key bellwether for the chip industry.
SK Hynix shares are trading up about 73% so far in 2025, having clocked a stellar spike in valuation over the past two years, as the chipmaker benefited from increased AI-fueled demand.
Shares of rival Samsung Electronics Co Ltd (KS:005930) rose 1.7% on Thursday.