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SK Hynix said it has already sold next year’s production of semiconductors as the leading supplier of advanced memory chips to Nvidia posted record profits on the back of an artificial intelligence boom.

Operating profit in the third quarter jumped 62 per cent year on year to a record Won11.4tn ($8bn), in line with analyst forecasts compiled by LSEG SmartEstimate. Revenue rose 39 per cent to Won22.4tn, driven by surging demand for memory chips used in AI data centres, the company said on Wednesday.

The South Korean chipmaker said it expected its inventory for conventional dynamic random-access memory chips, which enable short-term data storage when a device is being used, was “extremely tight”. It added that cutting-edge high-bandwidth memory (HBM) chips to continue to outstrip supply as use of AI applications broadens.

“With the innovation of AI technology, the memory market has shifted to a new paradigm and demand has begun to spread to all product areas,” said chief financial officer Kim Woo-hyun.

Optimism for SK Hynix’s business outlook intensified after the company, along with rival Samsung Electronics, signed a preliminary agreement with OpenAI this month to supply semiconductors for the ChatGPT maker’s $500bn Stargate data centre project.

SK Hynix said its estimate for demand from the project was more than double the industry’s current HBM capacity and that it would set up a production system to meet OpenAI’s demand.

The chipmaker said it had completed HBM supply negotiations with other key customers for next year and would “substantially increase” capital expenditure as a result. It will begin supplying its most advanced HBM4 chips in the fourth quarter of this year.

“HBM demand continues to increase rapidly, so it will be difficult for supply to meet demand any time soon,” said Kim Ki-tae, head of HBM sales and marketing.

SK Hynix makes up more than half of the global HBM market, while Samsung accounts for just over a quarter, with US-based Micron, the other leading company in the sector, according to consultancy TrendForce.

The company’s competitive edge in HBM has helped triple its share price this year, making SK Hynix one of South Korea’s best-performing stocks. Its shares rose 4 per cent on Wednesday.

SK Hynix said the AI market’s shift to inference — the process by which applications such as chatbots produce responses — had increased demand for high-performance AI server chips.

“We project AI inference memory demand to expand not only in the US but also in China as Chinese hyperscalers are expected to push for AI inference investment,” Citi analysts said in a recent report.

Samsung is expected to post its biggest quarterly profit in three years when it reports on Thursday.

“With AI as the major driver, we’re expecting the HBM market to continue growing steeply over the next few years to around $43bn by 2027, giving strong earnings leverage to memory manufacturers like SK,” said MS Hwang, research director at Counterpoint Research.

American Bitcoin (ABTC) shares slipped 5% Tuesday, catching the attention of investors as trading volumes remained steady. Given this move, many are curious about what may be driving the sudden adjustment in the stock’s price.

See our latest analysis for American Bitcoin.

American Bitcoin’s share price has certainly been on a rollercoaster lately. After a sharp 16.6% share price return in the past week, Tuesday’s 4.7% dip stands out and reflects the market’s ongoing debate over its true value. Looking at the year-to-date share price return of -11.4%, momentum appears to be struggling to build, even as the market reacts to every twist and turn.

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With such volatile swings and a lack of strong momentum, is American Bitcoin trading at an appealing discount? Alternatively, are investors already factoring in any future upside into today’s price, leaving little room for a bargain?

With American Bitcoin’s latest closing price of $5.68, its price-to-earnings (P/E) ratio of 31.8x stands in the spotlight, especially for those comparing it to both industry and peer averages. This figure gives investors a snapshot of what the market is willing to pay for each dollar of the company’s earnings.

The P/E ratio is a widely used metric for valuing companies like American Bitcoin, particularly in the software sector. It reflects the relationship between share price and per-share earnings and offers insight into how the market values the company’s profitability and growth potential relative to its stock price.

American Bitcoin’s P/E ratio of 31.8x is slightly lower than the broader US software industry average of 33.9x. This suggests the stock is not being priced at a significant premium within its sector. However, this multiple is notably higher compared to its peer average of 18.8x, which could indicate the market has elevated expectations for American Bitcoin or is pricing in more future growth than its peers. Yet, it remains debated whether the current earnings growth profile and risks fully justify this premium.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 31.8x (ABOUT RIGHT)

However, uncertainty around American Bitcoin’s actual earnings quality and a lack of visible revenue growth could present challenges to the bull case in the near term.

Find out about the key risks to this American Bitcoin narrative.

If you have your own perspective or want to explore American Bitcoin’s numbers firsthand, you can quickly analyze and build your personal view in minutes. Do it your way

A great starting point for your American Bitcoin research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ABTC.

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