(Bloomberg) -- Morgan Stanley analysts have raised their price target for SK Hynix Inc. about six weeks after downgrading the stock, a move that came after the bank’s sale order of the chipmaker’s shares triggered a review by South Korea’s market regulator.

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“Our assessment of Hynix stock was wrong in the near term – but not the memory cycle peak,” Morgan Stanley analysts including Shawn Kim and Duan Liu wrote in a Thursday note. They joined other analysts who raised the price target following its record quarterly results, but the Morgan Stanley analysts maintained an underweight rating for the shares.

The swift price target change shows how quickly analysts are being forced to change their view on the artificial intelligence sector. It’s also a reminder of Korean regulators’ interest in the firm’s Seoul branch sale order for the chipmaker’s shares in September, which came two days before the downgrade.

“We expect 2024 to be another banner year for SK Hynix, driven by DRAM prices continuing higher for 4Q, albeit at a slower pace, driving exceptional near-term earnings,” the Morgan Stanley analysts wrote.

Goldman Sachs Group Inc. and Eugene Investment & Securities Co. were among the firms that raised their price targets following the earnings report.

SK Hynix shares rose as much as 3.9% in Seoul Friday. After a dip in the summer — along with other AI-stocks — due to concerns over AI-momentum sustainability, SK Hynix shares have now returned more than 40% year to date.

The company’s record quarterly profit and revenue released Thursday reflected strong demand for its memory chips. The report also showed that the company was widening its lead over its Asian peers like Samsung Electronics Co. and Micron Technology Inc. in supplying the cutting-edge high-bandwidth memory that powers Nvidia Corp.’s AI accelerators.

Clouds Forming

Morgan Stanley analysts raised their target 8% to 130,000 won, but it is still the lowest among the firms covering the chipmaker.

“Clouds are forming” for SK Hynix starting this quarter, the Morgan Stanley analysts wrote, adding that the stock is their “least preferred” among the sector players they cover. Cyclical shortages are ending and there are “sustained risks” to its revenue and earnings as growth slows and pricing falls, they said.