Citi Raises SK Hynix Target Price to 3.1 Million Won

Driven by the continuous wave of AI, the storage chip giant SK Hynix has once again received strong endorsement from top Wall Street investment banks. In the latest report released by Citi on May 11, the target price for SK Hynix was significantly raised, reflecting extremely high expectations for the super cycle in the memory industry.

Citi's report increased the target price for SK Hynix from the previous 1.7 million won to 3.1 million won, nearly doubling, while maintaining a buy rating. The institution predicts that, benefiting from market dividends, SK Hynix's operating profit in 2026 is expected to reach a historic level of 251 trillion won.

The pricing increase of High Bandwidth Memory (HBM) is the core logic of this price adjustment. Citi expects that with the mixing effect of HBM4 products becoming apparent and the demand for HBM3e growing beyond expectations, the average selling price of HBM will jump by 30% quarter-on-quarter in the fourth quarter of this year.

The evolution of large model technology is profoundly changing the supply and demand structure of the storage market. Citi points out that Anthropic's recent doubling of its model token limit has significantly increased the demand for commoditized storage memory. As a core supplier in the industry chain, SK Hynix will directly benefit from this hybrid premium driven by the increased demand for AI computing power.

Aside from HBM, the performance of traditional storage products is also robust. Due to the sustained enthusiasm for data center expansion, the price of high-specification DDR5 memory modules widely used in mainstream servers will remain at high levels for the long term. At the same time, the new storage standard SoCAMM2, which offers higher integration and energy efficiency, is expected to be widely applied in the second half of 2026. This technology, which can significantly improve device performance and reduce power consumption, is expected to become another key variable driving SK Hynix's performance beyond expectations.

For investors, SK Hynix's current valuation logic has deeply inclined towards being a leader in AI storage. Citi's analysis believes that even if the market is concerned about the fluctuations in commoditized storage, the strong upward trend in HBM pricing will effectively hedge potential risks. The company's leading position in high-end storage is being transformed into a solid profit moat.

The market's focus will next turn to the actual release schedule of HBM4 capacity and the market penetration rate in the second half of 2026. In addition, the sustainability of storage bandwidth demand from downstream AI applications will directly determine whether SK Hynix can achieve the extremely high profit targets given by Citi as scheduled.