The call argues the South Korean memory chipmaker’s valuation still reflects pre-AI memory economics despite a stronger long-term profitability outlook.
UBS has initiated coverage on SK Hynix with a $204 price target, arguing the stock continues to trade as if memory markets were still operating under pre-AI dynamics. The note says the company is expected to deliver return on equity (ROE, a measure of shareholder profitability) above 40% through 2031, suggesting UBS sees a materially stronger earnings profile than the current valuation implies. The call underscores how artificial intelligence demand has reshaped the memory sector, where higher-value products tied to AI infrastructure can alter the industry’s profitability compared with earlier cycles.