Market Talk AI euphoria drives strong US demand for SK Hynix

One of the hottest tech companies in the world makes its U.S. market debut. South Korean chipmaker SK Hynix makes its Nasdaq debut today, and Ross Mayfield of Baird is here to discuss. Ross, the shares priced at $149. They're up about 14%. What do you make, first of all, of the price movement? Well, I mean, at the end of the day, the stock market is about supply and demand, and there is clearly demand from investors for pieces of the AI infrastructure build out. And as we've seen to start 2026, memory in particular, there is a massive shortage of memory. There are only a few players with the capacity to kind of meet it. And those players have all seen their stocks go parabolic. So for U.S. investors to be able to get a bite at a different apple here, I think it's clear there's demand and it's showing up in the price action today, even after what's already been a crazy move in these stocks across 2026. Well, talk to me more about that. Give us a little bit more of a background about this company, because this company and Samsung in Korea are basically the two big names, right? And the stock has exploded. Tell me a little bit more about that. Yeah, I mean, investors worry about concentration in U.S. markets at time, but if they take a look at some of the international markets, you know, Korea in particular, you would find two stocks make up more than half of the index. Both of them concentrated in this niche market of memory. SK Hynix is one of basically the big three memory makers along with Samsung and Micron. And this has emerged as one of the key bottlenecks in the AI data center build out. SK Hynix is probably the purest play for high bandwidth memory, a major supplier over the years to Nvidia. So they are as close as it gets to a pure memory AI kind of all pulled together. And the demand for that sort of thing is evident, both, you know, for the product and you can see it in the results from Samsung, you know, last week or Micron a few weeks back. The demand for the product is clearly there. And because of that, profitability is way up in the demand for the stock has followed. So all three have seen parabolic moves as a reflection of, you know, what is now the key bottleneck in this build out and the hundreds of billions in capex from the hyperscalers that are going towards solving this sort of problem. So what separates this company from the American company Micron that you've mentioned? I mean, SK Hynix, are they looking to make more inroads in terms of manufacturing here? Or how would you sort of compare these two companies? I mean, they are very similar. Both SK Hynix and Micron are in the business of providing memory chips to players like NVIDIA. I would say SK Hynix is a little bit more focused on the high bandwidth memory. So the stuff that's a little bit more integrated in the AI ecosystem. Now, Micron is making quick inroads there. Both companies, along with Samsung, have ambitions to expand capacity quickly to meet the demand that's there. But they are very similar. I would say if one had to think about how to differentiate them, SK Hynix might be a little bit more upscale in terms of high bandwidth memory and DRAM, and is a little bit more focused on AI in particular. So it might be a little bit more volatile as sentiment swings around the AI ecosystem. But at this point, all three, you know, are reflective of the same underlying core demand. So they're going to trade very similarly. Well, what's not similar are the stock prices right now, right? Because Micron is a very expensive stock. Do you see this between the ADRs here and the stock of SK Hynix? Do you see the gap closing somewhat between the share price of Micron, nine hundred and something dollars? And right now we're looking about one hundred and seventy two, three, four today. Right now, do you see that gap closing? What do you think? Yeah, I think so. I mean, I think the early trading action here and it is early, but is reflective of a U.S. investor base that has a lot of demand for this stock. And so I expect, you know, because they operate in such similar industries and, you know, have such similar end markets for their key products that the valuations and prices will converge on each other over time. You know, as U.S. investors get accustomed to owning this stock and, you know, difference between a U.S. listed stock and an ADR. But at the end of the day, yes, I expect a convergence. These stocks are kind of too closely linked and trading on the same big theme. So, yeah, I would expect SK Hynix to move in the same direction as Micron over time. And maybe Micron pulls back a little bit to more match SK Hynix. But the reality is the demand for memory is so large and so bottlenecked that both companies are in tremendous positions, have tremendous margins, tremendous pricing power. And while there are slight differences, you know, you could you could really take or pick either and probably be be very satisfied over the coming year or two as an investor. All right. Ross Mayfield from Baird. Thanks for joining us. And I'm Lisa Bernhardt for Reuters.