Meta, Google, Apple, Tesla, ChatGPT, OpenAI, Anthropic. These are all names you’re probably well aware of, and they’re all part of the money printing machine on Wall Street that is the AI trade.
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But out of relative shadow, or at least it feels that way to this finance journalist, we’ve quickly seen another name added to the list – SK Hynix. News of the company’s debut on Wall Street started floating around the circuit two weeks ago.
SK Hynix has since debuted on the Nasdaq composite quite late last week, in a US$26 billion IPO – one of the largest, outside of SpaceX – and it was hotly received by investors, closing out on Friday up just shy of +13%.
The American Depositary Receipts closed US$168 flat, after listing US$149/ea, and the share price evidences this must be a fairly sizeable company to command that valuation.
So what do SK Hynix actually do? Its warmly received debut on Friday does suggest pointed market interest, but perhaps not the kind of retail excitement that the SpaceX IPO (deliberately) caused. Long story short, SK Hynix are in the market of making computer memory, and that means microchips.
But the South Korean is one of the world’s largest manufacturers of computer memory, and that memory (picture a microchip) goes into the AI hardware that NVIDIA makes and sells.
So if there’s no SK Hynix, there’s no NVIDIA sales, and that would be a big blow to this golden era of AI hype. So that’s why the market liked the debut on Friday – the market has collectively discovered another key point of value attached to NVIDIA, which remains the leading AI stock due to its provision of GPUs.
And that key point of value is SK Hynix itself and the competitive advantage it holds in being one of few companies able to mass produce computer memory products – but the South Korean tech giant’s debut onto Wall Street, you could probably argue, has been foreshadowed all year by the record run the KOSPI’s been having.
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