SK Hynix shares appear undervalued amid concerns over artificial-intelligence financing, say Citigroup's Peter Lee and Jayden Oh. The South Korean memory-chip maker's current valuation of 2.7 times its 12-month forward earnings doesn't fully reflect the growth potential of its high-bandwidth-memory and enterprise-solid-state-drive products as AI inference demand grows, the analysts write in a note.

Average selling prices for the company's DRAM and NAND products--the two main types of memory chips--likely rose 28% and 24%, respectively, from the previous quarter in 3Q, they say.

They expect eSSD demand to grow 52.9% in 2027 and memory-supply shortages to persist through 2028. Citi maintains its 3,000,000 won target price and a buy rating on the stock.