AI spending refuses to slow: what SK Hynix and Broadcom reveal about the boom

AI infrastructure spending remains strong, but investors should distinguish companies gaining pricing power from those financing the expansion and carrying its risks.

• SK Hynix reported record third-quarter revenue of 104.6 trillion Korean won, up 328%, and operating profit of 83.3 trillion won, an 80% margin.
• Contracts with 14 customers cover more than half of SK Hynix’s planned production for 2027 and 2028, showing that high-bandwidth memory scarcity is supporting supplier pricing power.
• Bank of America, Citi, Morgan Stanley and Blackstone announced USD 63 billion of financing on 26 October to purchase Broadcom equipment for Anthropic, with deliveries expected from 2027.
• A separate financing vehicle will buy and lease the hardware to Anthropic, while Broadcom will protect senior lenders against falling equipment values; the structure supports sales but creates financial risks.
• Memory shortages could ease as capacity expands or demand weakens, while AI developers must generate enough revenue to cover computing costs and justify their commitments.

Takeaway: The AI buildout can continue without making every participant attractive: investors should monitor memory prices and long-term orders, compare AI revenue growth with computing commitments and cash generation, and assess portfolio concentration in the same spending cycle.