Shares of South Korean memory chip giant SK Hynix could nearly double over the next twelve months, according to Barclays, as the artificial intelligence boom fuels an enduring shortage of high-bandwidth memory that shows no signs of easing. The bullish call lands just days after the company’s American Depositary Receipts began trading on the Nasdaq, marking a new chapter for one of the world’s most critical semiconductor suppliers.
Barclays analyst Simon Coles launched coverage of the newly listed ADRs on Tuesday with an Overweight rating and a 12-month price target of $330. The target implies a potential upside of roughly 98% from recent trading levels around $167, and as much as 117% from Monday’s closing price of $152.35. The ADRs, which trade under the ticker SKHY, were priced at $149 apiece in last week’s offering, a deal that raised approximately $26.5 billion according to a U.S. regulatory filing.
At the heart of Coles’s thesis is a simple but powerful dynamic: the world needs far more memory than it can currently produce, and that imbalance is set to intensify. Barclays’ global DRAM model projects bit supply will grow about 20% year-over-year in 2027, while bit demand is expected to accelerate to 35% growth. The resulting gap, the bank argues, will keep the market in a state of “continued tightness for a number of years yet,” with only limited improvement arriving in 2028.
“We see some upside to gross margins nearer term but the biggest delta to Bloomberg consensus is materially higher 2027 revenues driven by HBM pricing uplift and SKHY’s strong position,” Coles wrote in a note to clients.
That pricing power has already reshaped the memory industry’s profit landscape. After years of boom-and-bust cycles that made the sector notoriously volatile, the AI investment supercycle has created what many on Wall Street now describe as a demand paradigm shift. The Roundhill Memory ETF (DRAM), a thematic fund tracking the space, is down about 17% over the past month but remains up 116% since its inception at the beginning of April, underscoring both the sector’s momentum and its recent consolidation.
Coles switched his coverage from SK Hynix’s Korea-listed shares to the U.S. ADRs following a week of investor meetings in the United States. The central debate, he said, revolves around a single question: “whether this time is different.” Feedback from those meetings suggests investors remain largely unconvinced. Skepticism centers on whether long-term agreements will truly protect pricing in a severe downturn, and on a valuation disconnect that has puzzled many market participants. Memory stocks are trading at mid-single-digit price-to-earnings ratios, while semiconductor capital equipment names command multiples of 30 to 40 times earnings.
Coles acknowledged the tension but pushed back. “We view memory as too cheap, but they are related” to the equipment names, he wrote, implying that the current discount fails to reflect the structural earnings power being built across the memory supply chain.
A further layer of the investment case rests on SK Hynix’s balance sheet. Barclays estimates the company will hold cash equivalent to more than 40% of its current market capitalization by the end of 2027. That cash pile, Coles argued, provides “ample opportunity to boost earnings growth through share buybacks.” Even under conservative assumptions—average selling prices flat from 2027 and declining modestly from 2028—Barclays models double-digit earnings-per-share growth in 2028, assuming a $50 billion buyback program.
On the competitive front, Coles expects SK Hynix to maintain its leadership in high-bandwidth memory, the ultra-fast chips that have become essential for AI accelerators like those produced by Nvidia. While the company is perceived to face technology disadvantages relative to Samsung (005930.KS), Coles believes those gaps will be “neutralised by HBM4E,” the next-generation memory standard. He forecasts SK Hynix will retain a greater than 50% share of the HBM market for years to come.
The report also addressed the emerging threat from China’s memory ecosystem, which is advancing rapidly in both DRAM and NAND. Coles noted that the top Chinese DRAM player’s DDR5 yield improved to more than 75% by the end of 2025, with bit shipments estimated to grow 55% year-over-year in 2025 and 48% in 2026. Despite that progress, he sees limited near-term impact on the global landscape. Any share gains by Chinese producers in DRAM markets outside China would free up only 1% to 4% of combined capacity at Samsung, SK Hynix, and Micron (MU), according to his estimates. The analyst also flagged that the top Chinese player’s HBM3 development remains delayed, with mass production likely pushed to 2027, and concluded that the global market is unlikely to shift materially “unless global CSPs start to use China DRAM for datacentre products.”
For investors weighing the memory rally’s durability, Barclays’ initiation offers a clear signal: the supply-demand calculus remains firmly in favor of incumbents like SK Hynix, and the financial firepower to reward shareholders is only beginning to be appreciated. With ADR trading now open to a broader base of U.S. investors, the stock’s next chapter may be defined less by whether this cycle is different, and more by how aggressively the company deploys its mounting cash reserves.