Micron vs. SK Hynix: Which Memory Chip Giant Is the Better Buy?

2 weeks ago 12

Adam Levy, The Motley Fool

Tue, August 11, 2026 astatine 3:40 AM CDT 3 min read

SK Hynix (NASDAQ: SKHY) gave American investors an casual mode to bargain its banal with its debut connected the Nasdaq past month. The Korean institution is 1 of 3 representation chipmakers whose valuations person soared amid increasing request for representation chips to code 1 of the biggest bottlenecks successful artificial quality (AI) close now. One of its biggest rivals, Micron Technology (NASDAQ: MU), has produced tremendous net maturation arsenic well, arsenic pricing for its chips climbs period aft month.

Micron has agelong been the easiest mode for American investors to bargain into the representation spot shortage. But with SK Hynix's debut past month, they present person different option. Which banal should you choose?

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A discount and an important narration

Due to the cyclical quality of representation spot stocks, some Micron and SK Hynix commercialized for precise debased price-to-earnings ratios. Micron trades for astir 5.7 times expected net for fiscal 2027 ending adjacent August. SK Hynix, however, trades for adjacent less, conscionable 5 times guardant net estimates.

That discrepancy exists contempt the 2 companies sharing akin gross maturation and operating borderline potential. In fact, 1 could reason SK Hynix is amended positioned than Micron implicit the adjacent fewer quarters, fixed its pb successful high-bandwidth representation (HBM) spot accumulation and adjacent narration with Nvidia (NASDAQ: NVDA).

Nvidia announced an statement with SK Hynix to unafraid proviso of HBM chips for aggregate years. The declaration could beryllium worthy $500 billion, according to reports. SK Hynix absorption noted that contempt slower-than-anticipated HBM4 income successful the 2nd quarter, it expects a ramp-up successful the backmost fractional of the twelvemonth to bolster income and mean selling terms for its chips. Its adjacent narration with Nvidia could beryllium what gives it that confidence.

At the aforesaid time, locking successful pricing with Nvidia done a semipermanent statement could headdress the highest of SK Hynix's net cycle. It's the trade-off some chipmakers person been making successful caller quarters: little upside contiguous successful speech for much predictability and little downside successful the future. Micron has besides struck respective semipermanent agreements, representing astir 20% of DRAM spot gross and one-third of NAND spot revenue.

Still, analysts presently terms SK Hynix astatine a importantly little aggregate of highest net than Micron. Analysts expect some to highest successful 2028, but Micron shares commercialized astatine adjacent to 5.5 times fiscal 2028 earnings, portion SK Hynix trades astatine conscionable 3.5 times 2028 earnings. Combined with SK Hynix's existent presumption with Nvidia, that makes the Korean institution a amended mode to put successful the representation supercycle close now.

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