Can 2026’s hottest corner of the stock market pass the IPO test? The artificial intelligence buildout has fueled massive gains in memory semiconductor stocks and other hardware companies through the first half of the year. Now, South Korean semiconductor memory manufacturer SK Hynix 000660, whose shares have more than tripled this year alone and are up nearly 2,000% from three years ago, is looking to tap US investors to raise a record $28 billion this week.

The sale of SK Hynix’s American depositary shares, which will trade under the symbol SKHY starting Friday, comes at a critical time for the company, the industry, and the overall stock market. The stock’s South Korean-listed shares may be up more than 700% over the past year, but they’ve fallen 25% since late June.

Meanwhile, on Tuesday, Korean electronics giant and semiconductor products manufacturer Samsung 005930 released earnings results that revealed slowing price increases, and investors sent the stock down 7%. It’s now down 18% from its peak last month. At the same time, US stocks have been red-hot through the first half of the year, but hardware companies like Micron Technologies MU, SanDisk DSK, and Western Digital WDC are each down double digits in recent weeks.

For investors in SK Hynix and other memory stocks, the tailwind of intense demand for products that led to steep price increases and big profits is turning into a headwind, amid warnings about a coming supply surge in chip production that will alleviate shortages and likely drive prices down. In fact, SK Hynix’s ADS sale is slated to fund two key projects.

“US investors still really like their tech stocks, but I think it’s not as much of a slam dunk as it appeared to be just a couple weeks ago,” says Steve Sosnick, chief strategist at Interactive Brokers.

SK Hynix’s record IPO

It’s already been a big year for IPOs, and along with the SK Hynix sale, more mega-tech offerings are expected. SpaceX dominated headlines in June, raising a record $75 billion at its offering (and another roughly $10 billion through the “greenshoe,” wherein underwriters can purchase additional shares). Investors are looking ahead to potential mammoth offerings from Anthropic and OpenAI, though reports suggest the OpenAI IPO may be on hold until 2027.

The SK Hynix offering will clock in as the second-largest overall IPO, according to Renaissance Capital. Among shares representing non-US companies trading on US exchanges—either through ADS or American depositary receipts—SK Hynix will eclipse the 2014 offering from Alibaba, which raised $21 billion.

Morningstar equity analyst Jing Jie Yu says that by issuing shares in the United States, SK Hynix likely hopes to capture the premium typically assigned to US companies over those traded in South Korea. “I view the [capital] raise mainly as a means for the company to bridge valuations between Korean and US memory players, as Korean memory valuations have historically lagged US peers,” he says.

SK Hynix aims to fund new chip capacity

The company’s stated reason for its US IPO is to use the proceeds to help pay for the construction of two previously announced key production and packaging facilities. SK Hynix is the second-largest memory semiconductor manufacturer in the world. Recently, the firm has had particular success with high-bandwidth memory chips used in AI servers. Like other companies specializing in AI hardware, huge demand has created bottlenecks and resulted in surging prices for SK Hynix’s products.

Of the two chip projects, one will come online within the first half of 2027, according to Yu. “This first fab alone will increase SK Hynix’s total headline capacity by roughly 60% from what it is today by 2030,” he says. “Our base case is that the upcoming Yongin fab, accompanied by expansions from Samsung, Micron, and Chinese entrants over the next two years, will improve demand/supply dynamics quite significantly. This will likely erode the pricing power the memory players currently have over their customers.” He says this could take the industry into a cyclical downturn.

This highlights the nature of semiconductor stocks, explains Nick Einhorn, director of research at Renaissance Capital. He notes that in 2023, SK Hynix had negative gross margins and suffered an overall loss. But since the third quarter of 2025, the company has doubled its revenue. “The challenge is that this is a very cyclical industry,” he says.

Limited upside seen for SK Hynix

Against this backdrop, Morningstar’s Yu has a cautious outlook. SK Hynix stock carries a 3-star rating, meaning it trades in fairly valued territory. “I see limited upside at current prices from a risk/reward perspective,” he says. “We think the market is pricing these stocks as having structurally higher and more stable profitability, but we disagree with this view.”

While memory companies such as SK Hynix currently enjoy strong pricing power that makes big price increases possible, Yu says they “only exist because of such deep undersupply.” As that supply comes online in 2027 and 2028, “supply/demand dynamics should improve tremendously, eroding the pricing power of memory players and leading to a cycle turn.”

The SK Hynix IPO and the broader market

Renaissance’s Einhorn says the general IPO environment supports the SK Hynix sale. “This is coming on the heels of the SpaceX IPO. It’s not a coincidence that we’re seeing another large deal, since that was getting a lot of interest and trading well.” He says IPOs in general have done well in 2026, pointing to the Renaissance IPO Index, which is up some 28%, compared with 11% for the broader US stock market. “There’s generally been more interest in the US equity market … and general interest in US IPOs,” he says.

However, Interactive Brokers’ Sosnick says that if the IPO doesn’t go well or is accompanied by a continued tumble in memory stocks, the potential ripples through the broader market could be bigger than the usual sector or industry rotation. “If you told me that in a normal situation, banks have been leading the market, now industrials are taking over—OK, fine,” he says. However, in this case, he says memory stocks have been a key contributor to overall market returns. Importantly, these stocks have seen an influx of fast-money traders, including leveraged exchange-traded funds, which have quickly multiplied the upward moves of individual stocks like Micron. “That could cause a change in market psychology if we are forced to reckon with leverage unwinding as opposed to a more normal rotation,” he says.