The Roundhill Memory ETF (CBOE: DRAM) has lost momentum and is stuck in a bear market. It has fallen more than 30% from its all-time high as most memory stocks slumped. At the same time, outflows have continued to rise as volatility in the sector continues growing.
DRAM ETF Has Slumped Despite Strong Constituent Growth
The Roundhill Memory ETF, one of the most successful fund launches this year, has come under pressure in the past few days. This retreat has coincided with weak performance among other top companies in the memory industry.
Samsung Electronics, for instance, has dropped 30% from its year-to-date high of KRW 374,000 to its current level of KRW 257,000. SK Hynix, the biggest player in the high-bandwidth memory (HBM) industry, has slumped from KRW 2.987 million to KRW 1.653 million. Both stocks have continued to slide even after announcing share buybacks worth over $100 billion combined.
Other memory stocks have slumped. Micron (NASDAQ:MU) has slipped from $1,253 in June to $932, while SanDisk (NASDAQ:SNDK) has moved from $2,355 to the current $1,485. Other top stocks like Kioxia, Seagate, and Western Digital have all plunged.
These stocks have slumped even as all of them published strong earnings reports. Micron’s earnings showed that its revenue soared to over $40 billion, with management signaling that its fourth quarter will move to over $50 billion. SanDisk’s revenue soared to $8.97 billion, up by 51% from the previous quarter.
It expects this growth to continue, helped by the large multi-year deals it has signed with top hyperscalers. Similarly, Western Digital’s revenue soared by 44% in the fourth quarter to over $3.75 billion, and the management expects this trend to continue.
Roundhill Memory ETF Outflows are Rising
The DRAM ETF is seeing increased outflows in the past few days. It suffered $32 million in outflows on Thursday last week after losing $422 million a day earlier. It has had over $857 million in outflows in the last five days.
These outflows have happened as concerns about the memory and AI industry remains. One risk is that we are in an artificial intelligence bubble that could burst in the coming months. Popular market watchers like Ray Dalio and Michael Burry have warned about this.
These outflows are also happening as investors book profits after the stocks surged to record highs. Even with their recent retreat, these companies remain among the top gainers this year. It is common for stocks and other assets to pull back after such spectacular gains.
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