A newly launched Roundhill Memory ETF (CBOE: DRAM) has become the fastest-growing ETF ever, as the AI boom fuels strong demand for memory products.
The Hottest Trade
According to an X post by The Kobeissi Letter on Sunday, "The memory chip trade is hotter than ever."
DRAM has accumulated $6.5 billion in assets in just 27 days, since its inception on April 2, and a record $10 billion in 30 days, a faster rate than any ETF in history. This move has broken the record of the iShares Bitcoin Trust ETF (NASDAQ:IBIT), which "took 30 trading sessions to cross the threshold" of $6.5 billion in AUM.
With $62.4 billion in assets under management, IBIT seeks to track the price of Bitcoin (CRYPTO: BTC). It has an expense ratio of 0.25% and trades in an average daily volume of more than 35 million shares.
The letter stated that the fund "ranks among the top 10 US ETFs by year-to-date inflows, out of over 5,000 listed funds." DRAM has pulled in $8.7 billion since its launch.
The memory stock ETF is now in "the top 20 most traded ETFs by volume," with an average daily volume of about 29 million shares. This is "up from the 34th most traded at the start of May."
Screenshot of the tweet from The Kobeissi Letter
The ETF, with an expense ratio of 0.65%, is now up about 90% since its launch.
DRAM In Focus
DRAM is the first U.S.-listed fund offering pure-play exposure to global memory semiconductor companies, which are at the center of AI-driven demand for faster, more efficient data processing and storage.
It holds 19 stocks with a higher concentration on the top three firms – SK Hynix, Micron Technology Inc (NASDAQ:MU), and Samsung Electronics Co Ltd (OTC:SSNLF) – accounting for 27.7%, 25.8% and 20.3%, respectively, according to the fund website.
SK Hynix soared about 59% since April 2 in Seoul, while Samsung rose more than 57% after hitting $1 trillion in its market capitalization early this month.
Micron rallied 91.5% in the same time frame. Melius Research analyst Ben Reitzes set a new Street high target of $1,100 for MU, up from the previous projection of $700, reflecting confidence in the memory and AI semiconductor market resilience.
Other firms like Sandisk Corporation (NASDAQ:SNDK), Seagate Technology Holdings Plc. (NASDAQ:STX) and Western Digital Corp (NASDAQ:WDC) make up for 4%-5% in the DRAM portfolio.
Memory Trade Outlook
Dave Mazza, chief executive officer of Roundhill Investments, said, "Memory is a critical bottleneck of the AI revolution, supported by a secular shift toward data-intensive applications and sustained demand growth.
However, the rapid growth does not come without risks, as concerns about a potential AI bubble emerge, similar to warnings previously voiced by investors like Michael Burry. Such dynamics, alongside the concentration risks posed by having 70% of the ETF’s value tied to its top three holdings, suggest that while the memory chip trade is currently thriving, caution is warranted moving forward.
Benzinga's Edge Stock Rankings indicate that DRAM maintains a strong price trend in the short, medium and long terms.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
Photo Courtesy: Ken stocker on Shutterstock.com
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