AI storage overheating warning! SK Hynix's stock price is experiencing severe fluctuations, analysts shout: distinguish between "short-term fluctuations" and "cyclical peak".

South Korea's chip giant SK Hynix saw its stock price fluctuate in Seoul market on Monday, initially dropping 4.7% in early trading before narrowing losses and gradually stabilizing as investors bought on the dip following the overnight plunge in US AI memory stocks. Due to the impact of this heavyweight stock, the South Korean KOSPI index also had an uncertain direction, plummeting 2.8% at the opening before rebounding to close up 0.6%. Samsung Electronics also rose in sync, with gains reaching 4.3% at one point. This sharp drop contrasts sharply with SK Hynix's high-profile debut on the Nasdaq last week. On July 10, SK Hynix's American Depositary Receipts (ADR) officially began trading on the Nasdaq. The offering was priced at $149 per share, raising a total of $26.5 billion, setting a record for the largest foreign company listing in the US. On its first day of trading, ADR opened at a 14% premium to the offering price at $170 and ultimately closed up 12.8%. SK Hynix Chairman Choi Tae-won at the time said, "This has always been a dream, and now the dream has finally come true." However, Wall Street's enthusiasm lasted only one weekend. SK Hynix's volatile performance was due to its ADR falling 9.3% overnight on Wall Street, almost wiping out most of the gains accumulated since its listing on July 10. This dip was mainly caused by concerns in the market about related expenses and valuations running too far, too fast. Memory and storage stocks across the board fell, with stocks such as Micron Technology and SanDisk not spared. Analysts pointed out that this recent plunge was the result of multiple factors resonating. On one hand, there was profit-taking as the "good news ran out." Yoon Yong-ho, senior analyst at NH Investment Securities, said investors chose to take profits after the major event of SK Hynix's listing on the Nasdaq. Since the beginning of the year, SK Hynix's stock in South Korea had risen more than threefold, accumulating significant unrealized gains. Additionally, there was a cooling of performance expectations. A report released by a Korean investment firm downgraded SK Hynix's performance expectations. The market had previously anticipated a significant increase in the shipment volume of the company's HBM4 chips from the second quarter, but actual deliveries seemed to not arrive as expected. Furthermore, due to SK Hynix's larger exposure in the high-bandwidth memory (HBM) market than its competitor Samsung Electronics, its benefits from the recent rise in traditional DRAM prices were relatively limited. Leveraged products also amplified the volatility. SK Hynix has become a popular target for global investors betting on the ongoing shortage of HBM chips to increase profits. Many investors used leveraged ETFs to amplify gains and losses. In Hong Kong, a single-stock leveraged ETF tracking SK Hynix under Southern Fund's Dongyin dropped more than one-third on Monday, marking the largest single-day decline since its listing in October last year. However, some analysts mentioned the need to distinguish between volatility and cycles. An analyst at Samsung Securities noted in a report, "The market was shrouded in panic and anxiety all day on Monday, but the key is to distinguish between short-term fluctuations and cyclical trends. A sudden 10% drop does not necessarily mean the end of a cycle. In the past, high volatility may have been seen as a cycle signal; but now, it should be viewed as a normal occurrence resulting from structural changes in the stock market." SK Hynix's CEO had previously stated that the memory industry will face the most severe supply shortage in 2027, predicting that demand will continue to exceed the company's capacity "until the next decade." The company led the HBM market with a 58% revenue share in the first quarter, with Samsung Electronics and Micron Technology holding 21% each. The tug-of-war between short-term fluctuations and long-term narratives may become the main theme of the AI memory sector in the coming months.