"In early January, 24/7 Wall St. selected South Korean memory producer SK Hynix (000660.KS) as one of our top picks for an AI stock that could double in 2025 . We singled out the stock for two primary reasons: it was cheap, and we believed SK Hynix could continue seeing astonishing growth rates in 2025 and beyond. How cheap was SK Hynix at the beginning of the year? The stock was trading for just 5.4X its next year's estimated profits."
"Memory stocks often trade at cheaper multiples because the industry is extremely cyclical. A crash in the price of memory could quickly depress SK Hynix's earnings. However, we argued that memory was becoming a critical bottleneck in the growth of large AI data centers being built across the world. Rather than SK Hynix trading near a cyclical peak, the stock was at the beginning of a 'super cycle' of memory demand caused by the growth of artificial intelligence."
"In this article, we'll examine SK Hynix's 2025 performance and whether the stock is still attractive after its 96% surge. In addition, we'll offer another international stock idea whose shares are down so far in 2025, but could rally on new developments in the memory space. Why Share of SK Hynix is Up 96% in 2025 2024 was a banner year for SK Hynix. After posting a loss of $9.40 per share in 2023, the company posted earnings of $20.09."
SK Hynix began the year trading at about 5.4X next year's estimated profits, reflecting typical memory-sector cyclicality. Memory demand is rising sharply due to artificial intelligence and a growing need in large AI data centers, creating a potential super-cycle. SK Hynix reported a loss of $9.40 per share in 2023, earnings of $20.09 in 2024, and analysts expect $31.80 in 2025. Shares have risen 96% in 2025, yet the stock currently trades near 7.8X estimated 2025 earnings. Another international memory stock with weaker 2025 performance could benefit from new industry developments.
Read at 24/7 Wall St.
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