SK Hynix's Q3 Earnings Report and Updated Investment Thesis

Today, SK Hynix delivered an exceptionally strong earnings report. Both revenue and operating profit hit all-time highs, with operating margin approaching 80%. Management also announced a substantial shareholder return program. Below is a clear breakdown of the earnings results and investment rationale. I. Q3 Sets Another Record: Revenue Surpasses 100 Trillion KRW for the First Time SK Hynix’s Q3 2026 revenue and operating profit both reached record highs. • Revenue: 104.6 trillion KRW, up 328% year-on-year • Operating profit: 83.3 trillion KRW, up 632% year-on-year • Operating margin: 80% Revenue exceeded 100 trillion KRW for the first time. Operating profit was approximately 9% higher than market expectations. What does an 80% operating margin mean? The memory industry has historically been highly competitive and subject to sharp cyclical swings—achieving an 80% operating margin is extremely rare. One figure warrants clarification: net profit stood at 39.8 trillion KRW—a 58% decline from Q2.

SK Hynix’s quarterly profit surges over 7-fold to $62.8 billion; operating margin nears 80%; the AI memory boom continues; Genie 4 enables real-time, interactive world simulation; Anthropic acquires a one-person biotech startup | Daily Log

1. SK Hynix’s quarterly profit surges over 7-fold to $62.8 billion: operating margin approaches 80%, and the AI memory supercycle continues accelerating. South Korean memory chip giant SK Hynix released its Q3 2026 financial results: revenue totaled 104.6 trillion KRW (approximately $78.9 billion), up 328% year-on-year; operating profit reached 83.3 trillion KRW (approximately $62.8 billion), more than 7 times the 11.4 trillion KRW recorded in the same period last year—setting a new all-time high. The operating margin stood at approximately 79.6%, up from 76% in Q2. Actual operating profit exceeded analysts’ consensus estimate (76.7 trillion KRW, per LSEG) by about 8.6%. This performance reflects robust demand for High Bandwidth Memory (HBM) from AI customers such as NVIDIA, as well as tightening supply-demand dynamics and rising prices for DRAM and other memory products driven by AI infrastructure expansion. Notably, SK Hynix’s Q2 operating profit had already reached a record 60.5 trillion KRW; Q3 saw a further 38% sequential increase—indicating that profit expansion in the memory sector remains ongoing, not merely a rebound from a low base last year. The strong, above-consensus results help alleviate market concerns about a rapid cooling-off of AI memory demand. 2. Google DeepMind launches Genie 4: A world model capable of real-time, interactive world simulation. Google DeepMind officially unveiled Genie 4—the latest generation of real-time interactive world model. It introduces native audio generation, enabling simultaneous production of environmental sounds, music, and character dialogue alongside visual world generation. Users can navigate the environment using keyboard inputs, or instantly modify weather, perspective, or add characters and objects via natural language—all without regenerating the entire scene. Under the hood, Genie 4 integrates Gemini Omni’s understanding of the real world with other Gemini models’ capabilities for maintaining continuity within simulated environments. Google states Genie 4 can be applied to game development and film previsualization, as well as robot and agent training. Currently, it is available only as a research preview to invited testers. Crucially, the most important capability of a world model is not photorealistic video generation—but rather, the ability to simulate how the world changes in response to human actions; the model must continuously predict and render the consequences of those changes. 3. Axiom completes formal verification of mathematics’ largest proof in 24 days: 43.1 million lines of Lean code, reusing 1.2 million lines from China. AI mathematics company Axiom announced that, using dozens of collaborative AI agents, it completed the full Lean formalization of the Classification of Finite Simple Groups (CFSG) theorem in just 24 days—and has publicly released all source code and proof dependencies. Finite simple groups are considered the fundamental building blocks of finite symmetry—akin to prime numbers among integers. The classification theorem proves that all finite simple groups belong to certain known families, including 26 sporadic simple groups—hence it is often dubbed the “periodic table of symmetry.” This monumental collective endeavor of 20th-century mathematics spanned decades and involved roughly 100 mathematicians. Its original proof is scattered across more than 500 papers totaling approximately 15,000 pages—earning it the nickname “The Enormous Theorem.”

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