The Hidden AI Trade Already up 31% in Just One Month
The Hidden AI Trade Already up 31% in Just One Month
Joey FrenetteMon, June 1, 2026 at 12:00 PM UTC
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Micron (MU) surpassed the $1 trillion market cap milestone amid 208% year-to-date gains driven by critical DRAM demand for AI data centers, with memory chip supply potentially constrained until 2027 or beyond; SK Hynix and Samsung offer cheaper valuations.
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The AI trade is hot, and it could stay hot for quite some time. Undoubtedly, much of the strength has been concentrated in the storage and memory stocks. The AI revolution is moving into that leftmost fast lane, and it feels like there's not enough DRAM, NAND, or SSDs to go around.
Just because the U.S. memory chip play in Micron (NASDAQ:MU) is already on the radars of just about everyone, as it hogs the headlines following its surge past the $1 trillion market cap milestone, does not mean investors shouldn't at least think about broadening their horizons to some of the lesser-known and perhaps lesser-invested names beyond the U.S. border.
With Micron shares gaining more than 5% on Friday's session, it feels like the parabolic ascent will be unstoppable going into the summer months.
Micron is in that perfect Goldilocks spot, and there really is no alternative but to do business with the firm to secure a scarce commodity that could become even scarcer as the AI data center buildout moves as fast as the supply of critical components allows. Indeed, DRAM is a critical chokepoint for the AI boom, and it could continue to be for some time.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and iShares MSCI South Korea fund didn't make the cut. Grab the names FREE today.
If you want a significant amount of the memory chips, you're just going to have to wait patiently in line until 2027. And there's some concern that the memory deficit could drag into 2028. Beyond that, who knows? Either way, for the bulls on memory and storage, I'd say that it makes sense to consider the South Korean stock market, which is very heavily weighted in the two other big-league memory chip makers in the magnificent trio, of which Micron is a part.
The case for diversifying into South Korea's memory titans
Undoubtedly, Samsung and SK Hynix have been every bit as explosive as Micron, with shares up 147% and a scorching 245%, respectively, year to date. Meanwhile, Micron is in the middle of the pack with a 208% year-to-date gain. Just like Micron, SK Hynix, and Samsung, they also surpassed the $1 trillion milestone recently amid their meteoric ascents.
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And while doubling down on a name like Micron, which many analysts still expected double-digit percentage upside for the firm over the next 12 months, I do think a name like SK Hynix has even more to offer on the value front, with shares going for 12.3 times price-to-sales (P/S) versus Micron at 18.0 times P/S.
Beyond value, I think SK Hynix has what it takes to keep moving at a slightly faster pace and perhaps with marginally higher margins. Indeed, profit margins could smash records as the memory supercycle continues onward.
In short, if you like Micron, I think there's every reason to love SK Hynix if not for the South Korean discount, which is narrowing of late, perhaps for diversification within the space, given SK Hynix's architectural differences.
Add its greater exposure to Nvidia (NASDAQ:NVDA) when it comes to high-bandwidth memory (HBM), and perhaps SK Hynix ought to trade at a premium to Micron, rather than a discount, at least in my view. When you consider just how global the memory market is, I'd argue that South Korea's memory plays have no real reason to be this discounted.
Combined with Samsung, which is an even cheaper name in the storage world, thanks in part to its added conglomerate discount (it's a massive firm with broad exposure to many key areas touched by the AI revolution), and I think it's worth exploring the name while it's going for just 5.1 times P/S or 7.4 times forward price-to-earnings (P/E).
The South Korean market is crushing the S&P — thanks to SK Hynix and Samsung
Indeed, the South Korean market is home to "cheaper," but no less explosive memory and storage leaders, and that's a major reason why the iShares MSCI South Korea ETF (NYSEARCA:EWY) continues to fire on all cylinders this year, gaining more than 31% in the past month, topping the S&P 500's mere still-very-respectable 6% gain over the same timespan.
I'm no performance chaser, but I do think that given the iShares MSCI South Korea ETF has around 45% of its exposure to SK Hynix and Samsung, the ETF is a great one-stop shop for the memory bulls who want exposure to something a bit cheaper than the likes of a Micron. Of course, you're getting plenty of other stuff in the ETF, mainly tech and industrials, which form just shy of three-quarters of the portfolio.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and iShares MSCI South Korea fund didn't make the cut. Grab the names FREE today.
Source: “AOL Money”
