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Today, attention is drawn to this company due to mixed earnings results, which are putting pressure on momentum names like SanDisk and Micron.
Yes, memory stocks are currently in a bear market. Looking at our semiconductor heatmap, Samsung isn’t displayed here since it’s not directly tradable in the U.S., but numerous other stocks in the sector show significant red indicators. This trend is expected to worsen. On a seven-day view sorted by equal weighting, many of these companies are down more than 20%. Critically, the DRAM ETF—a newer fund tracking the memory space—has dropped over 20% from its recent high. This is fueled by declines in Samsung, SK Hynix, and Micron. Micron, which is down 23.5% year-to-date, remains 225% above its cost basis, but market sentiment has soured. With chatter surrounding SK Hynix’s U.S. debut, there’s concern this IPO could mark a peak in the memory trade. Consequently, some are becoming cautious about further exposure, though opportunities may exist in sectors with supply-demand imbalances, such as capacitors, which could be the next major market play.
Jared, how significant is SK Hynix’s market entry?
I believe it’s a major event. It echoes headlines preceding SpaceX’s breakthroughs in the space sector. When demand is strong and regulatory hurdles clear, the announcement often precedes actual impact. At such points, the news may already be priced in, potentially triggering a sell-off post-celebration. Similar to those magazine covers declaring a sector’s demise, this IPO might represent a topside signal. The SK Hynix IPO on Friday feels particularly ominous to some observers.
