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strong buy signal has just appeared on SK Hynix. Now I will explain why this company is so profitable and why its profits will grow rapidly over the next 5 years. I'll show you this buy signal , and also talk about the deal we just made in today's video . I appreciate your time. So let's begin. CNBC recently took a comprehensive tour of SK Hynix's new manufacturing facility in Yongin.
This is a $ 720 billion project —yes, that's almost a trillion— aimed at manufacturing HBM memory for artificial intelligence in southwestern South Korea. This is the world's largest memory manufacturing facility. As you can see in this excellent mini- documentary from CNBC, the total investment in this SK Hynix complex is 18 times greater than the entire American chip manufacturing initiative.
This is a colossal construction, and we have already received news that the first plant within this cluster will begin operation in February 2027 . This means that SK Hynix's new capacity will be available very soon , which will allow them to increase their margins. Excuse me, increase overall revenue and sales volume.
It’s important to understand that industry leaders— from hyperscalers and Nvidia to Elon Musk, who is buying a lot of HBM for xAI, as well as executives at SK Hynix, Micron, and Samsung—believe that the industry’s shortage will only worsen in 2027, despite the launch of this and other plants around the world .
The memory shortage is likely to persist and be even more acute in 2027 than in 2028, as demand for artificial intelligence grows extremely rapidly. So this construction will not lead to the classic " boom and bust" cycle, where a memory company makes a profit, builds a factory, dumps excess production on the market , drives down prices, and loses its influence on the market.
On the contrary, this will allow SK Hynix, one of the fastest growing companies in the world, to grow even faster, as they will have more HBM and DRAM to sell. This is great news for investors, as it means SK Hynix will be able to continue growing revenue and hopefully maintain its extremely high margins, which have been around 84-86% recently.
It is important to understand that SK Hynix is the leader in the high- bandwidth memory market. They occupy 58% of the industry. Samsung and Micron each have 21% . So, SK Hynix is the best HBM stock in the world at the moment. And I'm going to show you the exact buy signal that appeared on the stock price chart.
I will also show the deal we made here on our Yubit trading platform. So we'll look at that in a moment. But I also want to discuss another piece of news very quickly. And that's it . SK Hynix recently, a few days ago, decided—the board of directors decided to authorize a 54 trillion won expansion at the Yongin Y2 plant inside this Yongin cluster.
Remember, this Yongin cluster is a huge supercluster of factories that was originally planned. This was the master plan for the facility, which was to be fully constructed by 2045. This end date has actually now been pushed back to 2038 as new funding has been allocated due to the company's rapid growth.
But the Yongin Y2 plant has been approved within the past few days, meaning construction will begin soon. The clean rooms are expected to open in early 2029, I understand, for Yongin Y2. This means that in 2027 we will see the emergence of new capacities at SK Hynix. Again, new capacities will appear in 2029 .
But modeling the supply volumes from these plants is quite simple, as it is easy to determine what they will produce. This isn't the first time someone has built an HBM factory, so we can get an idea of what the offering will look like. We can also very easily predict demand in 2027, 28, and 29 based on the pace of AI development.
And barring some major global economic catastrophe, the demand for artificial intelligence in 2029 will likely be four to eight times higher than it is now. This means that while the industry shortage will continue through 2027, it will likely spread into 2028 and 2029 as AI models require memory much faster than supply grows.
This means we are no longer in a memory cycle where companies get a lot of money, build new plants, dump supply into the market, and then collapse, losing pricing power. Instead, we are moving towards a future where these memory companies will be able to maintain their pricing power, sustaining extremely high profits.
That's why I say companies like SK Hynix and Micron are the next Nvidia . I realize that sounds a bit contradictory, but both of these companies are moving in the direction of becoming the next Nvidia. I mean, they will be able to make high profits, and unlike Nvidia, they own their own production .
Nvidia is a design firm that outsources chip production to TSMC and other contractors. SK Hynix and Micron own their own factories, which means higher capital expenditures in the short term. In the long run, this means higher profits because they don't have to pay TSMC's margins. These companies are extremely important to the development of artificial intelligence, and they will not stop being so anytime soon .
So, this is about companies. But, as we have repeatedly said on the channel, there is a big difference. There is a huge gap between a company and its fundamentals, and a stock and its technical picture. SK Hynix has been on a significant downward trend in recent months. If you look at Korean stocks, as they started falling before ADRs, you can see that SK Hynix shares fell a total of 58% in 34 days.
Despite this huge investment, despite the 86% return, we see this significant decline. And that's because the stock price is a completely different story than the company itself. The company provides strong momentum that should drive the minimum share price higher over time, which is what is happening.
As you can see, the lows continue to rise significantly in this parabolic manner. But this means that we will naturally see a major correction at some point. We are watching very closely to see when this correction will end . And I think there 's a very real possibility that it's ending right now. And all because SK Hynix just activated one of our critical buy signals.
And this is nothing more than a breakout above the 20- day exponential moving average. By the way, in yesterday's video, if you didn't see it, we talked about Micron giving an important buy signal. As you can see from yesterday's video, Micron shares rose sharply after the market opened, which we covered in our morning "Coffee and Crypto" stream: we saw Micron jump from an opening price of 910 to 940.
And this is thanks to that buy signal that we reported yesterday in advance of this breakout on our channel. If that's not a reason to subscribe, I don't even know what is. Micron showed growth after that buy signal. And now we see exactly the same thing happening with SKHENX , so I want to present this material to you today.
First, the fundamentals are simply incredible. This is truly one of the strongest fundamental narratives in the entire world at the moment . And this is not an exaggeration at all . We saw a signal to buy Micron, and I believe Micron is about to enter an uptrend, and it looks like SKH Hynix is doing exactly the same.
So, what do we do about this? First, I buy SKHEX with another $80 to build up the share of the spot market stock in our brokerage account . We will cover this in future Jeb McAfee Invest videos on our other channel. On this channel I want to share with you what our deals look like, and that's what we do here at Yubit.
If you haven't registered on Yubit yet, the link is in the description. You can see it right there. You can get a 25% discount on the commission. Scan the QR code or follow the link in the description . But anyway, we made a deal for SKH Hynix right here. Our entry price was 160. That's a very small deal because I want these deals...I want to see confidence grow.
As confidence in the movement grows, we will add more margin to these positions. But, as you can see, our SKHX and Micron deals are in profit. If you want to trade with me, again, the best place to do it is Yubit, the link is in the description below. You can trade stocks with leverage. We don't use 50x or 100x leverage like a bunch of amateurs.
We use 3x leverage because it is a safe size that I can manage much more comfortably and keep the position open for several weeks, as we want to trade these markets in a swing trading format. So I believe that SKHENX is in for a serious rally, and we have already opened a position on it. This deal will look something like this.
If we opened a long position, you can see that I expect SKH Hynix ADR to go well above 200. I believe it will not refresh the low. And that means if we get back well above 200, probably to 230-250, that's where I think the price will go over the next few months. We have a very healthy risk-to-reward ratio, which is going to be higher than two, and we will likely place our stop- loss here, at around 130.
So we are coming up with a risk-to-reward ratio of 2.5 to 3x. So this is our deal again. It's here, on Yubit. This is the reason why we believe the company has the strongest fundamentals in the world right now. I'm serious, I challenge you to find a stronger case from a fundamental perspective today.
Really, try taking one of the hyperscalers, maybe Google or Nvidia, you could argue, but guess who they buy their memory from? SK Hynix. SK Hynix is one of their key suppliers. They will stop without SK Hynix and Micron. They literally can't build AI without SK Hynix and Micron. So I would love to hear your thoughts in the comments below.
Who do you think has stronger fundamentals than SK Hynix and Micron right now? I think you will have a very hard time finding them. I also believe that SK Hynix and Micron are extremely undervalued right now , which is why we made a deal on them, because while the company itself is not driving massive growth, a stock price reversal is what is likely to happen in the very short term.
So, if you haven't already , be sure to subscribe to the channel to see all this stock content that we upload. Also, if you haven't subscribed yet, be sure to sign up with today's video sponsor , which is none other than iTrust Capital. They now have promotions online and it's fantastic. I just got an email last night that this will be up and running in the next few days.
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