This New Memory ETF Has Already Doubled. Is It Still a Buy?
The DRAM – Roundhill Memory ETF has already more than doubled in value since debuting in early April.
Overview
The memory market has been scorching hot, and one new exchange-traded fund (ETF) dedicated to the sector that was introduced on April 2 has already more than doubled its value. That ETF is the DRAM – Roundhill Memory ETF (NYSEMKT: DRAM), which is the first-ever memory ETF. The question, though, is whether the ETF is still a buy after its strong performance in such a short period of time.
The ETF's holdings are largely dominated by the big three DRAM makers: Micron Technology (NASDAQ: MU), SK Hynix, and Samsung. Together, the three stocks make up more than 73% of the fund's portfolio. The DRAM market has seen soaring prices, as demand for high-bandwidth memory (HBM), a special form of DRAM that is packaged with graphics processing units (GPUs) and other AI chips, has been surging. The entire DRAM market is supply-constrained, which is only exacerbated by HBM requiring upwards of three times the wafer capacity of ordinary DRAM.
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Originally published at www.fool.com.