Unafraid of pullbacks, Barclays believes: SK Hynix can double!

Barclays Bank has given a powerful endorsement to the newly listed SK Hynix U.S. stock with a highly impactful research report.

On Tuesday (July 14), Barclays initiated coverage on SK Hynix, assigning an “Overweight” rating and setting a target price of $330, which implies about 100% upside from the stock's closing price on Tuesday, meaning the stock price could double within the coming year. Boosted by this, SK Hynix’s U.S. ADR surged over 27% on Tuesday, ranking among the top ten trending stocks on the Stocktwits platform.

Barclays’ core thesis centers on three main factors: The ongoing memory shortage in the tech industry supports price hike expectations and revenue growth; SK Hynix’s strong position in the high-bandwidth memory (HBM) segment allows for a significant pricing premium; and the company’s robust cash reserves provide ample ammunition for large-scale share buybacks.

This view aligns closely with overall Wall Street sentiment—according to Koyfin data, among 37 analysts covering SK Hynix, 36 give a “Buy” or “Strong Buy” rating, with only one maintaining a “Hold” stance.

$330 Target Price: What's the Doubling Logic?

Barclays’ $330 target is the most striking number in this report. Analyst Simon Coles wrote in Tuesday’s note:

“We believe there is some upside in near-term gross margins, but compared with Bloomberg consensus, the biggest difference is our expectation of significantly higher revenue in 2027, driven by HBM price increases and SK Hynix’s strong market position.”

Barclays believes that the continued memory shortage in the tech industry is the core catalyst driving SK Hynix’s share price upward. Tight supply gives manufacturers stronger pricing power, directly fueling revenue growth. Within this reasoning, SK Hynix, thanks to its leading presence in HBM, is seen as the most direct beneficiary.

HBM Pricing Advantage: The Key Variable for 2027 Revenue

Barclays specifically points out that, compared to the consensus, its forecast for SK Hynix’s 2027 revenue is “substantially higher,” with the main source of this difference being HBM’s pricing premium.

HBM is a critical memory chip supporting AI compute infrastructure, and demand remains strong.

SK Hynix’s dominant position in the segment enables it to obtain higher product premiums in a tight supply-demand environment, thus creating significant revenue flexibility by 2027. This is also the core reason why Barclays’ forecast diverges most from consensus.

Ample Cash Reserves: Stock Buybacks Provide Extra Support

In addition to the revenue growth logic, Barclays also offers another layer of support for SK Hynix’s valuation from the balance sheet perspective. The bank estimates that by the end of 2027, SK Hynix’s cash holdings will amount to over 40% of its current market capitalization.

Such abundant cash reserves mean the company is well-positioned for large-scale stock buybacks. Buybacks not only directly elevate earnings per share, but also provide extra upward momentum for the stock price. Barclays considers this potential capital return path to be an indispensable part of its bullish thesis.

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