SK Square Crashes 15.6% as AI-Chip Euphoria Meets Gravity — Can the SK Hynix Bet Still Justify These Heights?
Shares of SK Square, the investment holding company that serves as investors' main proxy for AI memory giant SK Hynix, cratered 15.6% to KRW 925,000 on July 29, extending a brutal slide that has now erased more than half the stock's value from its June 30 intraday peak of KRW 2.19 million. The stock had climbed as high as 2.19 million won — a 17-fold surge from a previous low of around 130,000 won. The unwind is forcing shareholders to confront a simple question: how much of the AI future was already baked into the price?
The Entire Rally Was Built on One Asset — and That Cuts Both Ways. Investors were drawn to SK Square as SK hynix's largest shareholder with a 20.5% stake. When SK hynix powered past a $1 trillion valuation in May on insatiable demand for high-bandwidth memory chips used in AI servers, SK Hynix crossed a $1 trillion valuation, joining Samsung and Micron in a rally fueled by booming demand for AI hardware. SK Square rode the updraft. But a holding company amplifies moves in both directions, and today's drop shows the leverage working in reverse.
A Global Chip Rout, Not Just a Korean Problem. Chip stocks are trying to bounce after a $2 trillion sell-off pushed the group back to the line between a pullback and a breakdown.
After years of extraordinary gains, investors are reassessing whether valuations have run ahead of fundamentals. Catalysts include doubts about whether big tech's massive AI spending will pay off, reports of slowing memory-production expansion, and a hawkish Federal Reserve — all combining to trigger a "sell-the-news" reaction across the chip supply chain.
The Underlying Business Is Strong — the Price Simply Outran It. Semiconductor shares entered July after an exceptional rally; the sector had gained more than 80% during 2026 before the recent weakness. SK Hynix itself reported record 2025 revenue of KRW 97.1 trillion with a stunning 44% net margin, and its Q1 2026 revenue surged 198% year-over-year.
SK Hynix commands 58% of high-bandwidth memory revenue. The fundamentals haven't collapsed — but at 17× the prior low, any hesitation in AI spending becomes a trigger for profit-taking.
Analyst Targets Imply a Rebound — If You Believe the Bull Case. The analyst consensus target price for SK Square is KRW 2,060,000 — roughly 85% above recent levels. That gap either signals deep value or the market telling Wall Street its models are stale. For shareholders, the next signpost is SK hynix's upcoming earnings: second-quarter semiconductor industry earnings are expected to grow 131%. Anything short of blowout numbers could extend the pain.