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Intel vs. SK Hynix: Which Chip Stock Is Worth Chasing After This Week's Surge?
Key Takeaways
Potential partnership talks between Intel and SK Hynix have added a fresh catalyst for both stocks.
Intel's turnaround is gaining traction, but its valuation has become expensive.
SK Hynix is benefiting from surging AI-driven HBM demand and rising earnings estimates.
Intel (INTC - Free Report) ) and SK Hynix (SKHY - Free Report) ) have been among this week’s hottest semiconductor stocks as investors react to reports that the companies are exploring partnership opportunities to manufacture memory chips in the U.S.
The discussions reportedly center on Intel’s long-delayed Ohio manufacturing complex, with possibilities ranging from SK Hynix leasing capacity to a broader joint venture involving cloud companies. However, no formal partnership has been announced, and SK Hynix stressed that no specific plans or arrangements have been finalized.
Since reports of the potential partnership surfaced Wednesday, INTC shares have surged roughly 10%, while SKHY has climbed about 5%. Notably, SK Hynix stock has risen 20% since its U.S. Nasdaq debut in July, while INTC is up about 4% over the same period.
Image Source: Zacks Investment Research
Intel’s Continued Rebound
Intel’s turnaround is gaining traction even without a potential SK Hynix agreement. Most recently, Q2 revenue jumped 25% year over year to $16.1 billion, while Data Center and AI revenue surged 59% to $6.3 billion. Intel Foundry revenue also increased 31%, and management guided Q3 sales to $15.8-$16.8 billion (+15% growth).
Furthermore, the Zacks Consensus calls for Intel’s fiscal 2026 revenue to rise nearly 18%, followed by another roughly 14% increase in FY27 to $70.89 billion. More importantly, Intel’s earnings recovery is accelerating, with FY26 EPS expected to soar to $1.50 from $0.42 per share last year. Plus, FY27 EPS is projected at $1.96, representing another increase of more than 30%.
Still, much of INTC’s recent rally reflects optimism that its capital-intensive manufacturing network will attract more external customers, making a possible SK Hynix arrangement potentially important but far from guaranteed.
Image Source: Zacks Investment Research
SK Hynix’s HBM Growth Engine
SK Hynix arguably has the stronger secular growth story thanks to its leadership in high-bandwidth memory (HBM), a crucial component in AI accelerators from customers such as Nvidia (NVDA - Free Report) ) and Microsoft (MSFT - Free Report) ). The company also supplies memory products to Apple (AAPL - Free Report) ), giving it exposure to another major technology customer.
Reporting record Q2 performance amid robust AI demand, SK Hynix began mass shipments of HBM4, its latest generation of high-bandwidth memory, and expects production to ramp up through the second half of the year. Additionally, SK Hynix has shipped samples of HBM4E, an enhanced next-generation version of HBM4, while investing aggressively to expand AI-memory capacity.
The Zacks Consensus Estimate calls for SK Hynix’s FY26 revenue to soar over 250% to $240.09 billion, followed by another 55% increase to $371.26 billion in FY27. Earnings growth is similarly impressive, with EPS projected to jump more than 500% to $25.69 this year before rising another 27% to $32.66 next year.
Adding credibility to that growth outlook, FY26 and FY27 EPS estimates have jumped 21% and 12% over the last 60 days, respectively
Image Source: Zacks Investment Research
SK Hynix Has the Clear Valuation Advantage
Valuation is where these two stocks really separate.
Despite its superior exposure to the booming AI-memory market, SKHY trades at a mid-single-digit forward P/E multiple of 7X. Intel, following its tremendous turnaround rally, is trading at more than 100X forward earnings.
Furthermore, SK Hynix’s valuation is especially intriguing considering EPS estimates have continued moving higher as demand for HBM and other AI-memory products remains exceptionally strong.
Image Source: Zacks Investment Research
Bottom Line
Intel’s operational turnaround has become much more convincing, particularly with its accelerating Data Center and AI business. However, after INTC’s roughly 10% two-day surge, its elevated valuation leaves less room for disappointment.
SK Hynix, meanwhile, offers a compelling combination of AI-driven growth and a substantially cheaper earnings multiple, supported by its leadership in HBM.
Reflecting these differing setups, SKHY currently sports a Zacks Rank #2 (Buy), while INTC lands a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Shutterstock
Intel vs. SK Hynix: Which Chip Stock Is Worth Chasing After This Week's Surge?
Key Takeaways
Intel (INTC - Free Report) ) and SK Hynix (SKHY - Free Report) ) have been among this week’s hottest semiconductor stocks as investors react to reports that the companies are exploring partnership opportunities to manufacture memory chips in the U.S.
The discussions reportedly center on Intel’s long-delayed Ohio manufacturing complex, with possibilities ranging from SK Hynix leasing capacity to a broader joint venture involving cloud companies. However, no formal partnership has been announced, and SK Hynix stressed that no specific plans or arrangements have been finalized.
Since reports of the potential partnership surfaced Wednesday, INTC shares have surged roughly 10%, while SKHY has climbed about 5%. Notably, SK Hynix stock has risen 20% since its U.S. Nasdaq debut in July, while INTC is up about 4% over the same period.
Image Source: Zacks Investment Research
Intel’s Continued Rebound
Intel’s turnaround is gaining traction even without a potential SK Hynix agreement. Most recently, Q2 revenue jumped 25% year over year to $16.1 billion, while Data Center and AI revenue surged 59% to $6.3 billion. Intel Foundry revenue also increased 31%, and management guided Q3 sales to $15.8-$16.8 billion (+15% growth).
Furthermore, the Zacks Consensus calls for Intel’s fiscal 2026 revenue to rise nearly 18%, followed by another roughly 14% increase in FY27 to $70.89 billion. More importantly, Intel’s earnings recovery is accelerating, with FY26 EPS expected to soar to $1.50 from $0.42 per share last year. Plus, FY27 EPS is projected at $1.96, representing another increase of more than 30%.
Still, much of INTC’s recent rally reflects optimism that its capital-intensive manufacturing network will attract more external customers, making a possible SK Hynix arrangement potentially important but far from guaranteed.
Image Source: Zacks Investment Research
SK Hynix’s HBM Growth Engine
SK Hynix arguably has the stronger secular growth story thanks to its leadership in high-bandwidth memory (HBM), a crucial component in AI accelerators from customers such as Nvidia (NVDA - Free Report) ) and Microsoft (MSFT - Free Report) ). The company also supplies memory products to Apple (AAPL - Free Report) ), giving it exposure to another major technology customer.
Reporting record Q2 performance amid robust AI demand, SK Hynix began mass shipments of HBM4, its latest generation of high-bandwidth memory, and expects production to ramp up through the second half of the year. Additionally, SK Hynix has shipped samples of HBM4E, an enhanced next-generation version of HBM4, while investing aggressively to expand AI-memory capacity.
The Zacks Consensus Estimate calls for SK Hynix’s FY26 revenue to soar over 250% to $240.09 billion, followed by another 55% increase to $371.26 billion in FY27. Earnings growth is similarly impressive, with EPS projected to jump more than 500% to $25.69 this year before rising another 27% to $32.66 next year.
Adding credibility to that growth outlook, FY26 and FY27 EPS estimates have jumped 21% and 12% over the last 60 days, respectively
Image Source: Zacks Investment Research
SK Hynix Has the Clear Valuation Advantage
Valuation is where these two stocks really separate.
Despite its superior exposure to the booming AI-memory market, SKHY trades at a mid-single-digit forward P/E multiple of 7X. Intel, following its tremendous turnaround rally, is trading at more than 100X forward earnings.
Furthermore, SK Hynix’s valuation is especially intriguing considering EPS estimates have continued moving higher as demand for HBM and other AI-memory products remains exceptionally strong.
Image Source: Zacks Investment Research
Bottom Line
Intel’s operational turnaround has become much more convincing, particularly with its accelerating Data Center and AI business. However, after INTC’s roughly 10% two-day surge, its elevated valuation leaves less room for disappointment.
SK Hynix, meanwhile, offers a compelling combination of AI-driven growth and a substantially cheaper earnings multiple, supported by its leadership in HBM.
Reflecting these differing setups, SKHY currently sports a Zacks Rank #2 (Buy), while INTC lands a Zacks Rank #3 (Hold).