🔍 Read the full analysis: Before The Earnings Calls, Take Stock Of The AI Boom In Six Figures on ThorstenMeyerAI.com
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TL;DR
SK hynix reported preliminary third-quarter operating profit of 83.3 trillion won, 7.3 times its year-earlier result, while major U.S. technology companies were due to report earnings. The data point to strong profits for chip suppliers but concentrated U.S. earnings growth and heavy data-center spending; whether AI revenue can cover that investment remains unclear.
South Korean memory maker SK hynix reported preliminary third-quarter operating profit of 83.3 trillion won on October 28, up 7.3 times from a year earlier, as investors awaited results from Microsoft and Alphabet later Wednesday and Amazon on Thursday. The contrast captures the central question for the AI boom: chip suppliers are recording exceptional profits, while the technology companies funding data-center expansion must show whether rising AI revenue can support their spending.
SK hynix said third-quarter revenue reached 104.6 trillion won, up 328% year over year, and operating margin was 80%. The company’s preliminary results are unaudited. Net profit was 39.8 trillion won, down 58% from the previous quarter; the source attributes that divergence from operating profit to non-operating items. SK hynix also said long-term agreements with 14 major customers cover more than half of its planned 2027 and 2028 capacity.
The company expects demand to exceed supply through 2030, but that is a company forecast, not an established outcome. It announced a 14 trillion won dividend and a 20 trillion won share buyback for the quarter. The source says the buyback package includes shares for employee compensation, which SK hynix does not count as a shareholder return. Its shares rose during the Seoul session, though reports cited in the source gave different readings of the gain.
For U.S. stocks, FactSet estimated blended third-quarter S&P 500 earnings growth at 29.5% as of October 23. In an October 19 analysis, FactSet said growth would fall from 29.0% to 20.0% if Micron and Nvidia were excluded. Those figures are estimates, and several major companies had not yet reported. Separately, Alphabet, Amazon, Microsoft and Meta together planned about $725 billion to $745 billion in 2026 capital spending, calculated from company guidance by the source’s author.
Infographic 01 · The boom in numbers
Record profits, narrow growth, rising bills.
Six numbers from company releases, FactSet and the Census Bureau, before Microsoft, Alphabet and Amazon report.
Who carries the earnings boom
Q3 2026 earnings growth, year over year. Blended: reported results plus estimates.
The Wall Street Journal (Dow Jones Market Data) puts the two chipmakers at 34% of the expected growth. Top five contributors per FactSet: Micron, Nvidia, Meta, EchoStar, Boeing.
What the buyers plan to spend in 2026
Capital spending guidance, US dollars. Bars show the top of each range.
Q3 consensus: Alphabet free cash flow −$2.3B on $55.2B capex; Amazon −$9.9B on $58.7B. Definitions differ slightly (Microsoft includes finance leases).
Shovel seller
- Revenue 104.6 trillion won, +328%
- Long-term deals cover >50% of 2027–28 capacity
- About 100 trillion won back to shareholders in 2026
Real economy
- Core capital goods orders +10.9% this year
- Computer orders +20.3% this year
- Census data do not label AI; semiconductors excluded from orders
Debt nerves
- Cost to insure Meta’s debt +177% this year, Amazon’s +129%
- Oracle: $117B long-term debt, rated BBB-
- Off-balance-sheet leases don’t show up as debt (S&P)
Sources: SK hynix 3Q26 release, 28 Oct 2026 (preliminary); FactSet, 19 Oct 2026; Alphabet Q2 call, 22 Jul 2026; Amazon via CNBC, 30 Jul 2026; Microsoft via CNBC, 29 Jul 2026; Meta Q3 release, 21 Oct 2026; FactSet consensus via CNBC, 27 Oct 2026; US Census Bureau, advance durable goods report, 27 Oct 2026. Capex sum and bar scaling: Thorsten Meyer.
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Chip Profits Meet Big Tech Spending
The figures show why one market-wide label cannot capture the AI trade. Hardware profits are already visible in SK hynix’s reported quarter, while the much larger cloud companies are committing substantial sums to infrastructure. Those investments could support future AI services, but the source’s central test is whether revenue and cash generation grow enough to justify the outlay.
Concentration also matters to investors reading broad earnings totals. If two chipmakers account for a meaningful share of expected index growth, the headline figure may not describe the performance of most companies. FactSet’s estimate still implies 20% growth after removing Micron and Nvidia, so the comparison does not mean the rest of the index is contracting; it shows that a small number of firms materially affect the overall rate.
Capital spending has consequences beyond company accounts. U.S. shipments of core capital goods rose 1.2% in September, while orders for computers and related products were up 20.3% this year, according to Census Bureau data dated October 27. Those measures suggest investment is reaching suppliers, but they do not by themselves establish how profitable the resulting AI capacity will be.
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Signals From Seoul, Wall Street and Shanghai
SK hynix makes high-bandwidth memory, or HBM, used alongside processors in AI data centers. Its customers’ capacity agreements offer some visibility into future demand, though the company’s longer-term supply forecast remains its own expectation. The source also reports that SK hynix halted a review of funding or a possible listing for its U.S. unit Solidigm, with the chief executive citing market volatility and a correction in semiconductor stocks. That decision points to uncertainty even amid strong current results.
The U.S. earnings figures are also not final results. FactSet’s blended growth estimate combines reported results with estimates for companies still due to report. The source says analysts expected Alphabet and Amazon to post negative free cash flow again for the third quarter; that is an expectation, not a confirmed result. Their reports, alongside Microsoft’s, will offer new evidence on cloud growth, cash generation and planned investment.
China’s market provides a contrasting signal. Reuters reported on October 26 that the STAR50 index, tracking leading technology and chip companies, had fallen 40% since July and lost about $480 billion in value, while trading at roughly 100 times past earnings. The index’s decline is a market observation; it does not establish that U.S. AI shares will follow the same path.
“Demand will exceed supply through 2030.”
— SK hynix
Payback Still Depends on Results
The central unknown is whether AI-related sales will generate enough revenue and free cash flow to support the scale of planned investment. Capital-spending guidance alone cannot answer that question, and the cited expectation of negative third-quarter free cash flow for Alphabet and Amazon had not yet been verified in their results when this preview was written.
Several earnings figures remain estimates because companies had not reported. It is also unclear whether SK hynix’s current customer agreements and demand outlook will translate into the company’s forecast supply conditions through 2030. The source offers no post-earnings update, so this article does not report what the companies ultimately said on their calls.
Earnings Calls Set the Next Test
Microsoft and Alphabet were scheduled to report quarterly results on October 28, followed by Amazon on October 29. Investors will be watching for capital-spending guidance, cloud growth, free cash flow and capacity plans, the four measures identified in the source. Those updates can clarify whether AI demand is translating into sales and whether investment plans are changing, but one quarter will not settle the longer-term return question.
The source describes its article as an October 28 preview and says it plans to add a short, dated update after the results are released. Until those reports are available, the confirmed picture is a record preliminary quarter for SK hynix and high planned spending by large technology companies; the pace and profitability of future AI demand remain open questions.
Key Questions
What is the main development in this report?
SK hynix reported preliminary third-quarter operating profit of 83.3 trillion won, while major U.S. technology companies were about to report results that could shed light on AI investment and returns.
How much did SK hynix’s operating profit rise?
It rose to 83.3 trillion won from 11.4 trillion won a year earlier, or about 7.3 times the year-earlier figure, according to the company’s preliminary, unaudited release.
Why are investors focused on cloud growth and free cash flow?
Alphabet, Amazon, Microsoft and Meta planned a combined $725 billion to $745 billion in 2026 capital spending, based on the source author’s sum of company guidance. Cloud growth and free cash flow can help show whether that spending is being matched by business demand and cash generation.
Does the earnings-growth estimate describe all S&P 500 companies equally?
No. FactSet’s estimate was 29.0% growth before excluding Micron and Nvidia, and 20.0% after excluding them. The figures are estimates, and the comparison shows that those two companies materially affect the index-wide rate.
What remains unknown?
The results and guidance from the scheduled earnings calls were not included in this October 28 preview. It was also not yet clear whether AI revenue and cash flow would ultimately support the companies’ planned infrastructure spending.
Source: ThorstenMeyerAI.com
