Asian tech stocks soar on record SK hynix profit

Record results from SK hynix sent Asian markets soaring

Technology companies surged sharply on Asian exchanges on Wednesday after the earnings report from South Korean chipmaker SK hynix reinforced optimism about the AI sector ahead of results from Microsoft and Alphabet, AFP reports. The company said its operating profit for the third quarter rose 632% to $62.8 billion amid explosive demand for advanced semiconductors, and that it has now posted record revenue and operating profit for six consecutive quarters.

Context: from doubts to a new rally

As AFP notes, the AI sector experienced a mild correction this month over concerns about enormous capital spending, profitability and companies' finances, but has now gone back on the offensive. SPI Asset Management analyst Stephen Innes linked the market reaction to SK hynix reminding participants that 'someone at the other end of all this capital investment is cashing a check.' Optimism was also fueled by other events: on Monday Anthropic, the parent company of Claude AI, said in an IPO filing that its revenue for the first half of the year had grown by roughly 1,300% and announced major future capital investments, while on Tuesday Broadcom, together with Citi, Blackstone and Morgan Stanley, unveiled a $63 billion financing structure to build new capacity for Anthropic. Chris Weston of Pepperstone called the news a 'healthy shake-up' for the AI trade.

Market moves

Shares of SK hynix jumped nearly 9%, while its South Korean rival Samsung, which reports on Thursday, gained more than 8% — the Kospi index in Seoul rose 6.1% to 5,983.53 points. In Japan, the Nikkei 225 climbed 1.3% to 64,067.10: Kioxia surged more than 10%, Advantest rose 3%, and Tokyo Electron added 4%. Taipei was lifted by TSMC's strong results, while the exchanges of Hong Kong, Shanghai, Sydney, Singapore and Wellington also rose noticeably. The gains extended New York's momentum, where the Nasdaq had added more than 1% the day before.

What's next: Big Tech earnings and the Fed decision

Results from Microsoft and Alphabet are due the same day, with Amazon, Apple and Intel reporting on Thursday. In addition, traders are awaiting the US Federal Reserve's decision on Wednesday: according to AFP, after last month's rate hike the regulator is expected to take a pause, but the statement following the meeting and comments from Fed Chair Kevin Warsh will be closely scrutinized; markets are pricing in a hike in December. Oil became a separate factor: quotes jumped more than 1% as results came in from Israel's general election, on which the future of Prime Minister Benjamin Netanyahu's war against Iran may depend. According to polls, the ruling Likud and the opposition were running neck and neck; Netanyahu said he intended to form a new coalition and said he could work with US President Donald Trump on eliminating the 'existential threat' from Iran, while opposition candidate Gadi Eisenkot declared that the country had chosen change and that he would try to form a new government. West Texas Intermediate rose 1.2% to $101.14 a barrel, and Brent gained 1.5% to $115.61.