Single-stock leveraged ETFs tracking Samsung Electronics and SK hynix listed in May. The photo shows a mobile trading screen displaying the leveraged ETFs on their first day of trading. [Newsis]
Single-stock leveraged ETFs tracking Samsung Electronics and SK hynix listed in May. The photo shows a mobile trading screen displaying the leveraged ETFs on their first day of trading. [Newsis]

A US investment outlet has named SK hynix the top AI memory stock, ranking it above Micron and SanDisk. The assessment highlights SK hynix's investment appeal, citing a lower valuation than its rivals amid surging HBM demand driven by expanding AI data center investment.

The Motley Fool identified SK hynix as the most promising AI memory stock Monday in an article headlined "It's Not Micron or SanDisk. The Best AI Memory Stock Is This Korean Company."

The outlet noted that Micron and SanDisk have recently emerged as leading beneficiaries on expectations of growing demand for high-performance memory in AI data centers, but said "a more powerful opportunity may be hiding in plain sight" — pointing to SK hynix.

The outlet cited SK hynix's market dominance as the basis for its assessment. "With global hyperscalers expected to spend more than $700 billion on AI infrastructure this year, HBM and advanced DRAM are emerging as critical bottlenecks in the AI semiconductor supply chain," it said. SK hynix held a 56.4 percent share of the HBM market in the first quarter of this year, ranking first globally.

HBM is a high-performance memory chip used by AI accelerators to process large volumes of data. Faster and more power-efficient than conventional DRAM, it has become a key component for AI chipmakers such as Nvidia. SK hynix stands to benefit over the long term as AI data center investment continues to expand, the outlet said.

The Motley Fool noted that SK hynix trades at a lower valuation than its US peers. SanDisk carries a forward price-to-earnings ratio of about 5.9 times and Micron about 12 times, while SK hynix's forward P/E stands at roughly 5.5 times — a relative discount to both American memory chipmakers.

The outlet attributed the recent decline in SK hynix's share price not to weakening fundamentals but to elevated market expectations and a broader selloff in technology stocks. It added that the dip represents "a chance to buy one of the purest beneficiaries of expanding AI memory demand at a discount."

The Motley Fool also said the growth of the AI industry has shifted the memory chip market into a fundamentally different phase. Memory chips were once seen as a cyclical sector prone to oversupply and price declines, but the spread of generative AI has changed the picture — with high-performance memory including HBM now entrenched as a core component of AI data centers.


bbo@heraldcorp.com