July 10 SK Hynix’s U.S.-listed shares jumped 14% in their Nasdaq debut following its $26.5 billion share sale, in a sign of resilient investor enthusiasm for semiconductor stocks that have recently pulled back after a dizzying rally.
The South Korean chipmaker is the latest to ride a frenzy of investor interest in firms perceived as reaping big gains from the AI revolution that has spawned hundreds of billions of dollars in capital spending
Chip stocks have lost some momentum in recent weeks after a stellar run, partly due to investor concerns about slower AI spending. SK Hynix shares have dropped a quarter from their record high hit two weeks ago. Even so, the company’s stock is about 630% higher than a year ago. “Global semiconductors is the most crowded trade in the world right now,” said Thomas Hayes, chairman at Great Hill Capital in New York. “The bankers and the issuer, in this case SK Hynix, are meeting demand where it is.
They’re seeing excessive valuations, and they want to take advantage of it.” SK Hynix’s ADRs opened at $170 per share compared with the offer price of $149, a 2.7% premium above its average share price over the last three trading days in Seoul. Ten ADRs are equivalent to one common share. “Demand for the US share sale has been stronger than some people might have expected. That implies the memory chip rally might have just taken a breath rather than peaked,” said Dan Coatsworth, head of markets at AJ Bell.