SK Hynix Rebound Likely Short Squeeze, Not Demand Confirmation: Analyst

According to Garrett Jin's weekly report via ChainCatcher, SK Hynix and storage chip stocks' recent rebound may be driven by short-covering rather than confirmation of fundamental demand strength. Garrett Jin sold half of previously accumulated positions despite intact investment thesis, noting the rally "resembles a short squeeze" rather than market validation of chip fundamentals. South Korean leveraged ETF assets declined primarily due to net value erosion rather than investor exits, with cumulative net subscriptions still at historical highs. SK Hynix's 2026 capacity is fully sold out and Micron orders extend through 2028, but the storage sector remains cyclical; stock prices have advanced hundreds of percentage points ahead of underlying value.

Garrett Jin emphasized the market is transitioning from rewarding capex deployment to evaluating capex returns in the AI cycle. While demand remains strong through late 2027, cyclical stocks typically cannot sustain gains through valuation expansion alone.