The Memory Selloff: Record Profits, Collapsing Stocks

July 30, 2026

AI Summary

5 min read

SK Hynix, the world’s leading maker of high-bandwidth memory for AI chips, just reported a quarter where net profit exceeded total revenue—an effective margin of 118%. The company made more money in three months than it did in all of 2025. Its stock fell 25% in a month.

That contradiction is the center of this episode. The hosts argue that the recent selloff in AI and memory stocks—which wiped out more market value than the 2008 financial crisis in a matter of days—is a severe overreaction driven by analyst target games, leveraged liquidation cascades, and misplaced fears about Chinese competition. The underlying demand for memory, they say, has never been stronger and shows no sign of slowing.

Why the numbers look insane but the market panicked

SK Hynix specializes in HBM (high-bandwidth memory), the premium component that accounts for roughly half the cost of an Nvidia GPU. The company dedicated its entire fab capacity to HBM, sold out its entire 2026 supply, and still “missed” analyst revenue targets by about $1.7 billion. The hosts compare this to a student bringing home four A’s and one A-minus and getting punished for it. Because SK Hynix has no more inventory to sell this quarter, the only possible surprises are downside ones—so the market priced in the worst.

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What you'll learn

1 (00:00) **The Market Crash vs. Record Profits** - The hosts introduce the paradox of the worst market sell-off since 2008 occurring alongside record-breaking earnings from memory companies like SK Hynix.
2 (00:58) **The Damage: Memory Stocks in Freefall** - EJS details the scope of the sell-off in the Korean stock market, which is home to the world's largest memory manufacturers.
3 (02:53) **The Confusing Disconnect: Record Earnings vs. Market Dumping** - The hosts examine the core mystery: why are stocks crashing on the back of the best financial results in history?
4 (03:53) **Reason #1: The Analyst Target "Miss"** - EJS explains the first major reason for the sell-off: a technical miss on analyst revenue targets by a small margin.
5 (04:49) **Reason #2: The "Sold Out" Supply Constraint** - The hosts reveal a counterintuitive reason for the dump: SK Hynix has completely sold out of its high-bandwidth memory (HBM) supply for the quarter.
6 (06:56) **Reason #3: The Leveraged ETF Cascade** - The hosts identify a mechanical market factor: a 2x leveraged ETF on the Korean market triggered a cascading liquidation event.
7 (08:31) **The China Wildcard: CXMT's Record IPO** - The conversation shifts to a new Chinese entrant, CXMT (Shenzhen Memory Technologies), which became the most valuable company in China after a 466% IPO surge.

+ Full timestamped outline available in the app

Show Notes

Today, we need to discuss the sell-off in AI and memory stocks, including sharp declines in Korean equities and SK Hynix despite insane earnings.

We also cover the fragility of leverage-driven markets, China’s memory industry, and the outlook for continued AI-related demand for chips and infrastructure.

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TIMESTAMPS

0:00 Memory Stocks Crash
3:52 Why SK Hynix Is Dumping
7:02 Leverage Fuels the Selloff
8:30 China’s Memory Surge
12:00 ASML Rival Panic
15:47 AI Money Shifts Upstream
17:23 Open Source Misconceptions
18:56 GPUs Need More Memory
21:04 Agentic AI Drives Demand
23:08 What Investors Should Do

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RESOURCES

Josh: https://x.com/JoshKale

Ejaaz: https://x.com/cryptopunk7213

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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures⁠

Josh works with Anthropic as a contractor. All views expressed are his own and do not represent Anthropic, its leadership, or its affiliates. Nothing in this episode is investment advice.