Chip rally on SK Hynix record fades after Alphabet miss

U.S. semiconductor stocks climbed on Wednesday, October 28, after SK Hynix ↗ 2.78% reported record quarterly results. Micron Technology ↗ 5.12% jumped 5.9% and SK Hynix's U.S.-listed shares rose 13.3%, Reuters reported. The chip rally helped lift Wall Street ahead of earnings from Alphabet ↗ 0.78% and Microsoft ↘ 0.99%. By Thursday morning, though, much of that optimism had faded after Alphabet's report disappointed investors.reuters.com

A record quarter in Seoul

SK Hynix said third-quarter revenue reached 104.6 trillion won and operating profit hit 83.3 trillion won, an 80% operating margin. It was the first time the company's quarterly sales topped 100 trillion won, according to the company. Operating profit rose 632% from a year earlier and beat the LSEG estimate of 76.72 trillion won, CNBC reported. Net profit of 39.78 trillion won fell short of forecasts, partly because of foreign-exchange and investment-valuation losses, according to Yonhap and SBS. The company also said its DRAM and high-bandwidth memory volumes are "effectively sold out" through 2029, Korea JoongAng Daily reported. It plans roughly 100 trillion won in shareholder returns this year.news.skhynix.com+4

SK Hynix shares closed nearly 11% higher in Seoul, and the Kospi rose 6.63%, CNBC reported.cnbc.com

Wall Street follows

In U.S. trading, Nvidia ↗ 2.78% added 0.6%, AMD Advanced Micro Devices, Inc. ↗ 11.04% rose 2.0% and Micron climbed 5.1%, AFP reported. Marvell Technology ↗ 5.73% and Arm Holdings ↗ 4.74% each gained around 2%, according to NDTV Profit. The S&P 500 ↗ 0.31% and Nasdaq Composite each closed up 0.3%, Investopedia reported. The gains came after the Federal Reserve held rates at 3.75% to 4% in a 10-2 vote.ndtvprofit.com+2

"I think the market realizes what the Fed did today is one thing, but are AI expenditures continuing?" Carson Group's Ryan Detrick told Reuters.reuters.com

Big Tech results split

After the close, Microsoft beat expectations, with cloud revenue of $63.9 billion, while Alphabet missed on both revenue and earnings per share, Yahoo Finance reported. Alphabet fell sharply in Thursday premarket trading after reporting negative free cash flow of $9.07 billion, and Nasdaq-100 futures dropped more than 1%, CNBC reported. Microsoft rose in early trading. Nvidia, AMD and Micron were among the chip stocks that slipped after hours, according to Yahoo Finance.cnbc.com+2

Amazon Amazon.com, Inc. ↘ 0.35% and Intel ↗ 7.71% are due to report after Thursday's close, CNBC noted.cnbc.com