Advanced Micro Devices and SK Hynix represent two different bets on the AI hardware boom: AMD builds the processors, SK Hynix supplies the memory chips those processors need. A Motley Fool comparison of the two shows SK Hynix growing faster and trading far cheaper than AMD on forward earnings.
AMD leans on processors, SK Hynix on memory
SK Hynix trades at a forward P/E of 5.4x against AMD's 36.0x even though it grew revenue faster last year, a gap that puts the memory maker ahead in Motley Fool's comparison of the two AI hardware suppliers. AMD designs chips that power cloud servers and gaming consoles, supplying clients such as Microsoft and Sony. In late 2025 the company secured a partnership with OpenAI to supply graphics processors for AI infrastructure. SK Hynix instead makes the High Bandwidth Memory (HBM) that trains complex AI models, components the source calls indispensable for that work.
In its 2025 fiscal year, AMD posted revenue of $34.6 billion, up 34.3% from the prior year, with net income of $4.3 billion and a 12.5% net margin. Its balance sheet showed a 0.1x debt-to-equity ratio, a 2.9x current ratio, and $6.7 billion in free cash flow — though stock-based compensation made up 21.2% of operating cash flow, which inflates that cash figure since the expense is non-cash.
SK Hynix grew faster over the same period. The company reported revenue of 97.2 trillion Korean won, a 46.8% jump year over year, with net income of 42.9 trillion won and a 44.2% net margin. Its debt-to-equity ratio stood at 0.2x, its current ratio at 1.9x, and free cash flow reached approximately 18.2 trillion won.
Valuation gap favors SK Hynix
Despite outgrowing AMD, SK Hynix also trades at a price-to-sales ratio of 9.7x versus AMD's 22.4x. Both companies carry risks tied to their markets, however. AMD competes against Intel and Nvidia and depends on third-party manufacturer Taiwan Semiconductor, while export controls on China have already triggered inventory charges. SK Hynix, meanwhile, operates in the cyclical memory market, where price wars with rivals like Samsung Electronics can squeeze margins.
The Fool's pick: SK Hynix
Motley Fool analyst Robert Izquierdo credits AMD's roughly 250% share-price gain over the past year partly to CEO Lisa Su's leadership through the AI buildout. Yet he says he would prioritize SK Hynix, which began trading as American depositary shares on July 10 and still carries the far cheaper market cap relative to earnings.
He points to SK Hynix's roughly 50% share of the HBM market as a key edge, since AI models are hitting a "memory wall" where data can't be processed fast enough by conventional memory, a bottleneck HBM addresses. Izquierdo cites SK Hynix's second-quarter revenue, which hit 79.3 trillion won, a 51% jump from its first-quarter sales, as evidence that HBM demand is translating into results.
Source: The Motley Fool
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