Next week, SK Hynix, Samsung Electronics and Kioxia will announce their latest financial reports, which may affect the trend of chip stocks in the next stage
Next week, the three leading storage companies, SK Hynix, Samsung and Kioxia, will announce their latest results. Amid market concerns about the sustainability of AI investment and the reliability of long-term storage contracts, these financial reports will also become a "touchstone" to test the giant's profitability in this cycle. Whether the three financial reports can prove that AI demand is still being converted into orders for HBM, DRAM and enterprise-grade solid-state drives may affect the trend of chip stocks in the next stage. SK hynix will disclose its second-quarter financial results on Wednesday, July 29.
Next week, the three leading storage companies, SK Hynix, Samsung and Kioxia, will announce their latest results. Amid market concerns about the sustainability of AI investment and the reliability of long-term storage contracts, these financial reports will also become a "touchstone" to test the giant's profitability in this cycle. Whether the three financial reports can prove that AI demand is still being converted into orders for HBM, DRAM and enterprise-grade solid-state drives may affect the trend of chip stocks in the next stage. SK hynix will disclose its second-quarter financial results on Wednesday, July 29. The company's CEO Kwak Noh-Jung predicts that in order to meet the rapidly growing demand for AI, the tight supply of memory chips will continue beyond 2030. Thanks to rising average selling prices for DRAM and NAND flash memory, the market expects both businesses to achieve their fastest revenue growth since at least 2010. Samsung will officially announce its full second-quarter financial report on Thursday, July 30. Rising prices of DRAM and NAND flash memory, as well as increased HBM shipments, are also expected to support Samsung's second-quarter performance. Analysts also expect that with the increase in AI-related orders, Samsung's wafer foundry business capacity utilization will continue to improve, and the increased demand for HBM4 will also drive the company's profit growth in the second half of the year. Previously on July 7, Samsung had released preliminary performance data. Revenue in the second quarter increased by 129% year-on-year to 171 trillion won (approximately US$116.6 billion); operating profit during the same period was 89.4 trillion won (approximately US$58.4 billion), soaring 18 times year-on-year, setting a record for a single quarter in history. But the impressive results at that time failed to drive up the stock price. Samsung's stock price fell more than 7% the day after the preliminary financial report was released. Analysts believe that the market has fully priced in strong financial reports, and investors are "buying expectations and selling facts." Kioxia will release its financial report for the first fiscal quarter of fiscal year 2027 on Friday, July 31. The market expects its single-quarter profit to double compared with the previous quarter. As Japan's leader in flash memory, Kioxia's market value surpassed Toyota's in mid-June and once became the company with the highest market value in Japan. However, its stock price halved in the next month. From the above three financial reports, what the market wants to verify is how long the current memory chip boom cycle can last, and whether the storage industry can truly get rid of the cyclical nature? Bulls believe that AI-driven storage demand is structural rather than cyclical. As cloud vendors continue to increase capital expenditures, memory chips are transcending cycles. The bears believe that cycles will always be cycles. Some analysts believe that the current pricing power brought about by tight supply may not be maintained in the long term. Excessively high storage prices may also squeeze data center project returns and form a "storage tax." If there is excessive investment in AI computing power construction, cloud vendors' capital expenditures and market sentiment may cool down. Some analysts also believe that although global HBM wafer production capacity will continue to increase, the new capacity will mainly be used to alleviate the existing supply gap. HBM production capacity may remain tight until at least 2027, and oversupply may not become a major risk before 2028. The further popularization of AI agents may also continue to expand the demand for computing power and HBM. Morgan Stanley analyst Joseph Moore sees the recent weakness in storage stocks as an "excellent buying opportunity." He said in a report released on July 20, local time, "Through communications with data center purchasing managers, we confirmed that the memory shortage has not eased at all" and predicted that "memory prices in the third quarter will increase by at least 25% compared with the previous quarter." "Although adjustments in the memory industry are inevitable in the short term, the current weakness in stock prices is actually a buying opportunity... The memory shortage is likely to continue not only until 2027, but also into 2028." From this point of view, the market will focus on three points next week: how much cloud manufacturers' capital expenditures can be converted into real storage orders, whether HBM, DRAM and NAND price increases can continue, and whether leading manufacturers can maintain supply during the process of expansion.
Market analysts believe that if the three companies continue to give strong orders and price guidance, chip stocks may experience short-term adjustments in profit-taking next week, but the long-term trend can be expected; however, if management prompts that price increases slow down, customer inventories increase, or there is pressure on new production capacity, market concerns about AI investment returns may further spread from cloud manufacturers to chip manufacturing.
Market analysts believe that if the three companies continue to give strong orders and price guidance, chip stocks may experience short-term adjustments in profit-taking next week, but the long-term trend can be expected; however, if management prompts that price increases slow down, customer inventories increase, or there is pressure on new production capacity, market concerns about AI investment returns may further spread from cloud manufacturers to chip manufacturing.