SK hynix (SKHY) reported solid Q3 results driven by "DRAM pricing strength," while management's outlook supports the view that the memory "upcycle" could continue through 2027, RBC Capital Markets said in a report Wednesday.

Demand is expected to "outpace supply" for the next few years, with 14 long-term agreements now covering more than 50% of total capacity in 2027 and 2028, the firm said. HBM4 is also "off to a strong start" and is expected to surpass HBM3E in both volume and revenue share in Q4, the report said.

The firm estimates HBM pricing will rise 80% to 100% in 2027, while the company's management has said HBM is essentially "sold out" through 2029.

The firm expects SK hynix to maintain its HBM market-share lead, while "surging GenAI demand" and structural supply constraints support the current memory upcycle, according to the report.

RBC reiterated an outperform rating on SK hynix, with a price target of $200.

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