SK Hynix earnings ease concerns about peak AI spending

eToro analyst Josh Gilbert stated that SK Hynix's latest financial report is expected to ease market concerns that AI spending growth is about to hit a ceiling. Gilbert pointed out that the South Korean chip giant responded to the two main concerns of investors by significantly increasing shareholder returns and securing more than half of its future two-year capacity through long-term contracts. Although the memory industry has traditionally had a tendency for companies to over-expand capacity simultaneously, SK Hynix's current performance has boosted market confidence. He noted that the company's 80% operating profit margin indicates strong pricing power—something that only occurs when customers are competing for supply. SK Hynix's largest clients are lining up to secure supply. If companies thought AI infrastructure construction was about to stagnate, they would not be signing five-year contracts.