AI chip fever returns? SK Hynix share price surges 13% after blockbuster $26.5 billion US listing

South Korean memory chip giant SK Hynix made a strong debut on the Nasdaq, with its U.S.-listed shares surging 13% after the company raised $26.5 billion through its American listing. The sharp gain suggests investor appetite for artificial intelligence (AI)-linked semiconductor stocks remains robust despite the recent correction in the sector.

The listing marks another milestone in the AI investment boom that has propelled semiconductor companies to record valuations as technology giants continue to spend hundreds of billions of dollars on AI infrastructure. As South Korea's second most valuable company, SK Hynix has emerged as one of the biggest beneficiaries of the AI-driven demand for advanced memory chips used in data centres and AI applications.

SK Hynix's American Depositary Receipts (ADRs), where 10 ADRs represent one common share, opened at $170, compared with the offering price of $149 per ADR. The issue price itself represented a 2.7% premium to the stock's average trading price over the previous three sessions in Seoul.

The transaction is the second-largest U.S. share sale, following SpaceX's record Initial Public Offering (IPO) last month. According to a Reuters report, the proceeds are expected to support the construction of new manufacturing facilities while giving SK Hynix direct access to the world's largest pool of equity investors. The offering was reportedly subscribed more than seven times, highlighting strong institutional demand.

The strong U.S. debut comes even as semiconductor stocks have lost momentum in recent weeks after an extraordinary rally, with investors becoming increasingly cautious about the sustainability of AI-related capital expenditure.

SK Hynix's shares listed in Seoul have declined about 25% from the record high reached two weeks ago. Despite the correction, the stock remains approximately 630% higher than its level a year ago, reflecting the enormous gains generated during the AI boom.

The rally has been driven by aggressive spending from leading technology companies on AI infrastructure. Growing demand for advanced AI processors has significantly increased the need for high-bandwidth memory (HBM) chips, creating supply shortages and driving up prices. As a result, investors increasingly view memory chip manufacturers as the "picks and shovels" providers of the AI revolution.

The trend has also benefited SK Hynix's U.S.-based rival Micron, whose shares have climbed 711% over the past 12 months. Analysts believe SK Hynix's U.S. listing could help narrow the valuation gap between the two companies by expanding its global investor base and improving access for international investors.

Despite being a market leader in HBM chips, SK Hynix currently trades at around 5.8 times forward earnings, compared with approximately 7 times for Micron, according to a Reuters report.

The Nasdaq debut also comes roughly a month after Elon Musk's SpaceX completed the largest IPO on record. Over the past year, SK Hynix's market valuation has increased more than sevenfold, as soaring demand for AI infrastructure has led to shortages of advanced computer memory and pushed chip prices sharply higher.

The successful U.S. listing underscores that, despite recent volatility in semiconductor stocks, investors continue to back companies expected to benefit from the long-term expansion of AI infrastructure and memory chip demand.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.

Pranati Deva is a seasoned financial journalist with over a decade of experience in high-pressure newsroom environments, currently working as a Senior Sub Editor at LiveMint. Over the years, she has developed a reputation for sharp editorial judgement, a strong grasp of market dynamics, and the ability to translate complex financial developments into clear, engaging stories for a wide audience. <br><br> Her core areas of coverage include ...