Just now, South Korea's KOSPI index fell by more than 3.8%, and SK Hynix dropped by over 8%.

The reason is that the local Korean brokerage KIS downgraded Hynix's second-quarter performance forecast. Although the numbers still look staggering: revenue of 80.9 trillion won, up 264% year-over-year, and operating profit of 60.4 trillion won, surging 556% year-over-year—these are astronomical figures in any industry.

But the market had generally expected profits to reach 65 trillion won, and now it's only 60.4 trillion won, a gap of nearly 8%. Consequently, missing expectations led to a sell-off.

So why did it fall short of expectations?

The blame lies in Hynix selling too much HBM. HBM is indeed a high-value-added product, but most of it is tied to long-term fixed-price contracts, with prices locked in early. Meanwhile, ordinary DRAM and NAND prices are soaring in the spot market. Because Hynix has too high a proportion of long-term contracts, it couldn't benefit from this spot price surge, which dragged down the overall average selling price. As a result, the profit margin actually fell by 8 percentage points compared to the first quarter.

In short: you thought it was a high-end champion, but it ended up being dragged down by its own long-term contracts.

The brokerage also said this round of downgrades isn't called a "bomb," but rather "recalculating the books." This is because the entire memory industry is increasingly leaning toward signing long-term supply contracts. While this brings stability, it also flattens the upper limit of profit flexibility. Therefore, institutions cut profit forecasts for 2026 and 2027 by 9% and 11% respectively. The target price, however, remained unchanged at 3.8 million won, sending a clear message: the long-term logic isn't broken, but don't expect any more short-term surprises.

Today's drop is, frankly, a classic case of failed expectation management. Before this, Hynix's stock price was already priced for the belief that it would "exceed expectations every quarter." Analysts, to maintain their ratings, frantically raised their targets, and the company, to support its valuation, had to keep painting a bigger picture. When it came time to deliver, even if the absolute figures were still at record highs, the slightest slowdown in the growth rate caused the bulls to immediately turn.

This is the so-called terror of consensus. When everyone believes it will always exceed expectations, it must exceed expectations every single time; otherwise, it's a failure. To maintain such high expectations, the next quarter needs to provide even higher guidance, and the quarter after that must be higher still... This is a game of diminishing marginal returns with no end.

Once there's a slight deviation in any link, even just an 8% shortfall, the stock price shows its colors with a 7% drop.

Today's drop is a warning bell for all high-valuation sector stocks:

When everyone's expectations are fully priced in, any performance that merely meets expectations is a failure, and any slight downgrade is a death sentence.

That is the real horror story.