Morgan Stanley upgrades SK Hynertech to hold with caution, and the HBM track reverses the script of the storage cycle.

Morgan Stanley analysts recently revised their investment rating on SK Hynix, the South Korean memory chip giant, upgrading their "sell" rating to "hold." The firm admitted that its downgrade in September last year was a misjudgment, as the market's expectations for the company's competitiveness in the high-end memory chip market have significantly improved since then, driving its share price up 18% against the backdrop of a general decline in global AI-related stocks due to the technology cost reevaluation triggered by China's DeepSeek AI model. In a report released on Tuesday, the Sean Kim team noted: "We had predicted that the memory chip industry would repeat a cyclical downturn and that SK Hynix would face more intense competition in high-bandwidth memory (HBM) in 2025, but the reality far exceeded our expectations." The controversy over the rating adjustment by the Wall Street investment bank has drawn attention from the South Korean financial regulator, which is verifying its compliance. The analyst team revised its forecast model and raised the target price by 53% to 230,000 won mainly based on two supports: the favorable pricing environment in the spot market signals the industry cycle turning point, and the stable long-term market share in the HBM field brings sustainable high returns. Despite the upgrade, the analysts remain cautious: "Historical experience warns us against making simple predictions based on the 'past development trajectory = future trend' linear thinking. Every technology cycle has its uniqueness. Maintaining the 'hold' rating rather than 'buy' is based on our respect for the uncertainty of technological iteration." This judgment acknowledges the positive changes in the current market while leaving a safety margin for possible technological innovation shocks, reflecting a deep understanding of the typical cyclical volatility of the semiconductor industry.