Nasdaq Rises 0.3% as Chip Stocks Jump After SK Hynix Posts Record Results

Key Facts

The Nasdaq Composite rose 0.3% at 9:35 a.m. Eastern time on October 28, in a session when the S&P 500 gained 0.2% and the Dow Jones rose 31 points, or 0.1%, according to the Associated Press. The moves came after U.S.-listed shares of SK Hynix jumped 7.8% in premarket trading, while Micron rose 4%, according to Reuters via Investing.com. The gains extended to Western Digital, up 4.5%, AMD, up 1.5%, and Marvell Technology, up 1.7%. Chip stocks advanced after SK Hynix reported record quarterly results, as investors assessed whether AI-related demand was translating into actual revenue and profits. The company's shares also closed at $145.36 on October 27, up from $142.62 in the previous session, according to EL7 data.

SK Hynix reported revenue of 104.6155 trillion won and operating profit of 83.3338 trillion won in the third quarter of 2026, along with net profit of 39.7756 trillion won. The company said revenue and operating profit reached record levels. Compared with the second quarter, revenue rose 32% from 79.3187 trillion won, while operating profit increased 38% from 60.5426 trillion won. The comparison shows the company's performance accelerating between consecutive quarters, while its statement did not attribute the results to beating analyst expectations. The company said memory business growth came alongside increased demand for products related to AI servers.

SK Hynix said DRAM performance benefited from a sharp increase in sales of DDR5 servers, and that HBM4 shipments began on a large scale. It added that sales of HBM4 and high-value-added server products expanded in the third quarter. The company expects HBM4 to become its main product starting in the fourth quarter, surpassing HBM3E in shipment volume and revenue during that quarter. The shift puts the new memory product at the forefront of the company's near-term sales growth outlook. The company's comments link third-quarter results to broader demand for memory used in servers, alongside an expected shift in the product mix in the coming months.

On the supply side, SK Hynix said it expects memory demand to continue outstripping supply through 2030. It attributed that outlook to the difficulty of advanced manufacturing technologies and the long time required to build new factories. The company said it had signed long-term agreements with 14 major customers, covering more than 50% of its total production capacity for 2027 and 2028. Those agreements provide visibility into a large portion of future production capacity, while the company expects the market to remain in a state of excess demand. Its plan combines securing future sales through customer agreements with expanding memory products that it said are seeing strong demand.

The company announced a plan to return about 100 trillion won to shareholders during fiscal 2026. The plan includes cash dividends of at least 30 trillion won, as well as share buybacks and cancellations worth at least 60 trillion won. These figures connect strong operating results with the capital distributions the company approved for shareholders during the year. In South Korea, the Kospi rose 6.6% on Wednesday after SK Hynix shares surged in Seoul, according to the Associated Press. The Nasdaq had risen 1.2% in Tuesday's session on October 27 to 26,477.81 points, a gain of 308.43 points, while the S&P 500 advanced 0.6% and the Dow Jones rose less than 0.1%.

Investors next turned their attention to the Federal Reserve's decision after the Federal Open Market Committee meeting ran on October 27 and 28, with the press conference scheduled for October 28. The prevailing expectation on Wall Street was that the central bank would leave interest rates unchanged, while markets focused on any signals about subsequent meetings. The decision had not been released at the time of the report. Microsoft and Alphabet were also expected to report quarterly results after the U.S. market close on Wednesday, coinciding with the Fed decision. The 10-year U.S. Treasury yield stood at 4.99% on the eve of the decision, after topping 5.30% earlier in the month, according to the Associated Press.