Good morning, investors. The Iran conflict is unfolding once again in new, unpredictable ways and yet Wall Street is only paying attention to the new trillion-dollar AI behemoth that’s hitting US markets today.
Everything is about SK Hynix now.
Memory demand keeps rising
Memory chips spent the last 50 years as the most boring corner of tech but the AI buildout doesn’t work without them.
The Korean chipmaker SK Hynix is set to start trading today on the Nasdaq after pricing a $26.5 billion offering that came seven times oversubscribed, behind only SpaceX’s IPO as the largest share sale in US history.
While SK Hynix and its memory peers Micron and Samsung briefly entered a bear market earlier in the week — and despite the re-ignition of the Iran conflict — anticipation of the new US listing helped juice tech stocks across the board Thursday.
As the bulls know, the demand story is simple.
SK Hynix controls more than half the market for critical high-bandwidth memory chips for the AI economy, and its entire 2026 output is already sold.
Its shares in South Korea are nearly 700% over the last year and the company has climbed above a $1 trillion market cap.
The listing cements enthusiasm for a rotation that has unfolded all year:
Micron is up 215% year-to-date
AMD is up 145% year-to-date
Nvidia is up 7.5%, less than the S&P 500 this year
Palantir is down 23% year-to-date
Rather than making moonshot bets on AI narratives and hype, investors have become fixated on the physical bottlenecks and key suppliers of the AI economy.
That’s why there’s $26 billion in demand for a Korean chipmaker on a US exchange.
It’s the latest signal in Wall Street’s scramble to capture the layer of the AI trade with the biggest supply-demand discrepancy.
It’s true that memory cycles historically end in a supply glut and collapse in prices.
The massive demand for SK Hynix is one big bet that this time really is different.
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Market snapshot
Elsewhere
🚀 SK Hynix priced its blockbuster US listing at $28 billion. Demand ran seven times the available shares in what would rank as the second-biggest US share sale in history behind only SpaceX's June IPO. (Yahoo Finance)
📉 AstraZeneca saw its worst trading day since March 2020. A Phase 3 trial of the drugmaker's heart medicine eplontersen missed its primary endpoint alongside partner Ionis Pharmaceuticals, which fell more than 20%. (CNBC)
🤖 The Magnificent 7 are at the cheapest forward multiple in over a decade. The group now trades at roughly 26x forward earnings versus nearly 35x in December 2023. (Yahoo Finance)
🤖 Meta is putting its own AI chip into production this September. The "Iris" chip will reportedly double Meta's data-center compute and reduce the company's dependence on Nvidia hardware. (CNBC)
Rapid-fire
The South Korea benchmark entered bear territory, down 23% from its June peak (CNBC)
PepsiCo beat revenue estimates but missed on adjusted earnings (CNBC)
Nvidia stock climbed after a report that China may allow domestic AI firms to buy a limited number of H200 chips (TheStreet)
Penguin Solutions surged 25% after crushing earnings estimates with its best quarterly revenue ever (Yahoo Finance)
This tiny forgotten bank is set to skyrocket as a multi-year compounder (Best Ideas Club)
Wall Street doesn’t want to pay up for historic earnings (Opening Bell Daily)
Full Signal
Julia Hermann is a global market strategist at New York Life Investment Management.
She joined me on Full Signal to discuss her non-consensus view on the Fed, the memory stock sell-off, parallels between the AI buildout and the dot-com era, and why financials look undervalued right now.
Tune in on Spotify, Apple Podcasts or YouTube.
On this day
🗓 July 10, 1832: President Andrew Jackson vetoed the recharter of the Second Bank of the US. The Bank War helped fuel the Panic of 1837 and shaped monetary policy for a century.
Last thing
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