Keep an eye on SK Hynix (NASDAQ: SKHY).

The company is reportedly spending billions of dollars to buy back its own shares as it tries to reassure investors that the company is worth more than its current stock price suggests.

The South Korean memory-chip maker said it will spend $28.7 billion to buy back shares over the next three months. The program will begin Thursday.

The announcement comes after a steep drop in SK Hynix’s stock. Shares in Seoul have fallen by nearly half since reaching a high in June. Even after that decline, however, the stock is still more than twice as valuable as it was at the start of the year. The company believes investors have become too pessimistic. SK Hynix said its current share price does not reflect what it calls the company’s “intrinsic value,” or what the business is really worth based on its future potential.

A Substantial Pile of Cash

SK Hynix has plenty of cash to work with because demand for memory chips has exploded. The company’s chips are an important part of the technology used to power artificial intelligence, including data centers and advanced computing systems.

The company’s financial results have improved dramatically as a result.

Analysts expect SK Hynix to generate about KRW 170 trillion in free cash flow in 2026, up from KRW 25 trillion in 2025. Profits have also jumped. SK Hynix’s profit rose 557% in its most recent quarter, and analysts expect full-year profit to increase by about 484%.

With that much cash coming in, the company is promising to give more of it back to shareholders. SK Hynix said it plans to return more than 50% of its cumulative free cash flow to investors. It is also considering both regular and special dividend payments.

Today, the company said it will start buying back about 24 million shares, equal to roughly 3.3% of all outstanding shares.

What happens next?

Management believes the stock is worth more than the market currently thinks.

The company has strong profits, a large amount of free cash flow and exposure to the growing demand for AI-related technology. Its decision to spend $28.7 billion on a share buyback shows just how confident management is in the company’s future.

The bigger question is whether investors share that confidence. If demand for memory chips stays strong and AI spending continues, SK Hynix could benefit significantly. But if concerns about interest rates, AI investment or the semiconductor cycle grow, the company’s stock could remain under pressure. For now, SK Hynix is betting heavily on a strong future.

Sincerely,

Ian Cooper

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