Some Investors Believe SK Hynix Could Be the Next Big AI Stock. History Says It's Not Time to Buy Shares Just Yet.
The surge in demand for memory chips is real, but investors may want to wait to buy SK Hynix until its ADR premium is more in line with historical averages.
Overview
South Korean memory chip company SK Hynix (NASDAQ: SKHY) began trading on the Nasdaq Exchange through a large secondary listing earlier this month, and after an initial boom, the stock has been pretty volatile.
SK Hynix's common shares were already publicly traded on South Korea's exchange, and the new listing was for its American depositary receipts (ADRs) -- essentially, certificates that represent the underlying foreign stock, making it simpler for U.S. investors to buy and sell it on American markets.
Details
Many investors are likely hoping SK Hynix will be the next big artificial intelligence (AI) stock. The company provides important memory products for data centers, and its sales and earnings have been surging amid rising demand and tight supply.
Source
Originally published at www.fool.com.