Prediction: Nvidia-SK Hynix Partnership Will Make Both Stocks Big Winners
2026-07-28 17:27
•Geoffrey Seiler •The Motley Fool
••••• •••• Axe Capital view
Nvidia-SK Hynix Deal: A Quiet Win for Tech and Memory Stocks
Nvidia's pact with SK Hynix secures scarce memory for AI chips, setting both stocks up for growth.
Nvidia’s move to lock in high-bandwidth memory (HBM) from SK Hynix is a smart defensive play in a market where memory bottlenecks have become the AI industry’s Achilles’ heel. For Nvidia, this deal reduces the risk of shortages that could hamper its data center growth—a business segment priced at a forward P/E of around 15x, surprisingly reasonable for such a dominant player. SK Hynix stands to gain from stable, long-term revenues tied to these supply contracts, trading at under 6x forward earnings, which may lead to multiple expansion if investors appreciate the predictability. For South African investors, this matters indirectly through USD/ZAR. The rand could tighten against the dollar if global chipmakers continue spending, supporting local tech importers and companies like MTN that rely on robust telecom infrastructure. The risk here is that AI hype fades faster than expected or that alternative memory technologies emerge, disrupting both stocks’ growth narratives. this is just my opinion and not financial advice
I would buy Nvidia with a 6- to 12-month horizon, backing its supply chain moat, and watch SK Hynix for a clearer earnings recovery before adding. Keep an eye on USD/ZAR as a gauge of global tech appetite impacting local flows.
- NVDA
- SKHY
- USD/ZAR
- AI sector hype fades
- New memory tech disrupts HBM demand
6/10
Nvidia and SK Hynix announced a major partnership involving HBM supply and AI data center development. The deal positions Nvidia to secure its dominance in AI infrastructure with guaranteed high-bandwidth memory supply, while SK Hynix gains long-term revenue visibility and potential stock multiple expansion. Both companies are expected to benefit significantly from this strategic alliance.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Geoffrey Seiler
Categories: Equities, Earnings, Technology, AI, Semiconductors
Tickers: NVDA, SKHY, ASML, AVGO
Sentiment: Positive - Securing massive HBM supply strengthens its AI infrastructure dominance, provides competitive moat in inference market, and trading at attractive forward P/E of 15x for fiscal 2028. Partnership de-risks supply chain and positions company for continued growth. Major partnership provides significant revenue growth driver, increases business visibility through long-term contracts, and de-risks capital expenditure expansion. Stock trading at low forward P/E under 6 with potential for multiple expansion.
Keywords: HBM supply, AI infrastructure, memory bottleneck, SK Telecom data center, inference market, supply chain advantage, long-term contracts
Insights:
- NVDA: Positive: Securing massive HBM supply strengthens its AI infrastructure dominance, provides competitive moat in inference market, and trading at attractive forward P/E of 15x for fiscal 2028. Partnership de-risks supply chain and positions company for continued growth.
- SKHY: Positive: Major partnership provides significant revenue growth driver, increases business visibility through long-term contracts, and de-risks capital expenditure expansion. Stock trading at low forward P/E under 6 with potential for multiple expansion.
- ASML: Neutral: Mentioned as the sole supplier of EUV lithography machines critical to HBM and GPU manufacturing, but no direct impact analysis provided in the article.