As concerns over tariffs and AI intensify, SK Hynix's bearish bets reach an all-time high
SK Hynix's short selling amount reached approximately USD 1 billion in April, setting a monthly record. At the same time, overseas institutions net sold more than KRW 2.9 trillion of the company's stock this month, also a record. Analysts state that the South Korean government's lifting of the short selling ban on March 31, combined with investors' waning enthusiasm for AI themes and the trade war initiated by the United States, has led to heightened short-selling sentiment
This month, the short interest in SK Hynix reached a historic high, partly due to the South Korean government's lifting of the short-selling ban on the company's stock.
On April 23, according to data compiled by Bloomberg, the short-selling amount for SK Hynix stock in April alone has reached 1.5 trillion won (approximately $1 billion), expected to set a monthly record. Meanwhile, overseas institutional investors net sold more than 2.9 trillion won of SK Hynix stock this month, also a record.
Analysts say that the South Korean government's cancellation of the short-selling ban on March 31 has dealt a blow to SK Hynix, as the company is facing a critical moment. On one hand, with DeepSeek's low-cost breakthrough, the market is beginning to reassess the trading value of the AI industry, and investor enthusiasm for AI themes is waning. On the other hand, the U.S. has initiated a global trade war, raising concerns about a global economic recession.
Therefore, even though SK Hynix is expected to release strong financial results, short-sellers are still betting on a bleak outlook. Gary Tan, a portfolio manager at Allspring Global Investments in Singapore, stated:
"The short sentiment may be driven by the ongoing tariff uncertainties in the semiconductor industry, leading to an unclear long-term outlook for U.S. AI capital expenditures. SK Hynix is the most affected among memory chip manufacturers."
Benefiting from strong demand for memory chips due to AI applications, SK Hynix's stock price has doubled over the past two years. However, the company's stock price has come under pressure this year, and so far, SK Hynix's stock price has fallen about 20% from its January peak.
The media pointed out that although the market expects the company's upcoming financial report may show that SK Hynix could surpass Samsung Electronics for the first time to become the world's largest DRAM supplier, the stock price remains under pressure. Jung In Yun, CEO of Fibonacci Asset Management Global Private Limited, stated:
"SK Hynix's financial report is not the most important factor for investors. If the company releases strong financial results, investors may cash out further at this time, as it may provide a good profit opportunity."
