Barclays Sees More Than 100% Upside for SK Hynix Stock
Barclays began covering SK Hynix’s newly listed American Depositary Receipts on Tuesday. The bank assigned the shares an Overweight rating and set a price target of $330.
That target suggests potential upside of nearly 117% from Monday’s closing price of $152.35.
The SK Hynix ADRs trade on the Nasdaq under the ticker SKHY.
Memory-Chip Supply Could Remain Tight
Barclays analyst Simon Coles expects supply conditions across the memory-chip industry to become even tighter in 2027. He believes the market may experience only limited relief in 2028.
According to Coles, this imbalance could support substantial growth for SK Hynix and other major memory producers.
Barclays expects global DRAM bit supply to increase by approximately 20% year over year in 2027. However, DRAM bit demand could grow by as much as 35% during the same period.
As a result, demand may continue to exceed supply for several years.
SK Hynix ADR Listing Raises $26.5 Billion
Barclays transferred its coverage from SK Hynix’s Korea-listed shares to the company’s newly launched ADRs.
SK Hynix priced the Nasdaq-listed ADRs at $149 each on Thursday. The offering raised approximately $26.5 billion, according to a regulatory filing in the United States.
The listing provides American investors with a more direct way to gain exposure to one of the world’s leading memory-chip manufacturers.
Investors Remain Cautious About the Memory Cycle
Following a week of investor meetings in the United States, Coles said many investors remained unsure whether the current memory-chip cycle would be different from previous cycles.
A major concern involved long-term supply agreements. Investors questioned whether these contracts would protect memory pricing during a severe industry downturn.
There was also debate about the wide valuation gap between memory-chip manufacturers and semiconductor equipment companies.
Memory stocks often trade at mid-single-digit price-to-earnings ratios. By comparison, semiconductor equipment businesses can trade at earnings multiples of between 30 and 40.
Coles believes memory stocks remain undervalued, although their performance is closely connected to the equipment sector.
Chinese Memory-Chip Producers Expand Capacity
Barclays also highlighted the rapid progress of China’s DRAM and NAND memory industry.
The leading Chinese DRAM manufacturer reportedly improved its DDR5 production yield to more than 75% by the end of 2025.
Its bit shipments were estimated to increase by 55% in 2025 and another 48% in 2026.
However, Barclays believes Chinese producers will have only a limited effect on the international DRAM market in the near term.
Limited Global Impact From Chinese Competition
Coles estimates that market-share gains by Chinese DRAM manufacturers outside China would release only around 1% to 4% of the combined capacity of Samsung, SK Hynix and Micron.
Therefore, he does not expect China’s growing memory industry to significantly alter the global market for now.
That outlook could change if major cloud-service providers begin using Chinese DRAM products in their data centers.
China’s leading DRAM producer also continues to face delays in developing HBM3 memory. Barclays believes mass production may not begin until 2027.
SK Hynix Expected to Maintain Its HBM Lead
Barclays expects SK Hynix to preserve its leadership position in high-bandwidth memory.
HBM chips are increasingly important for artificial intelligence data centers because they help advanced processors handle large volumes of information.
Coles believes any perceived technology disadvantage compared with Samsung could be reduced or eliminated with the introduction of HBM4E.
SK Hynix could therefore retain more than 50% of the global HBM market for several years.
Share Buybacks Could Support Earnings Growth
Barclays also sees growing potential for SK Hynix to return more capital to shareholders.
The bank estimates that the company could hold cash equal to more than 40% of its current market value by the end of 2027.
This strong cash position could give SK Hynix significant flexibility to repurchase its own shares.
Share buybacks would reduce the number of outstanding shares and could help increase earnings per share.
Barclays Models Double-Digit Earnings Growth
Barclays expects SK Hynix to continue delivering double-digit earnings-per-share growth in 2028.
The forecast assumes that average selling prices remain unchanged during 2027 before declining moderately in 2028.
It also includes a potential $50 billion share-buyback program.
Overall, Barclays believes tight DRAM supply, strong AI-related memory demand, SK Hynix’s leadership in HBM and possible shareholder returns could support major upside for the stock.
