Company Interview / Retail investors keep buying SpaceX... should you?

Key points

Strong AI-driven momentum in SK Hynix, Samsung and Micron Premium and conversion risks for SK Hynix ADRs on Nasdaq Significant customer concentration around Nvidia across major memory makers

Kylie Purcell from Stake outlines why SK Hynix remains a focal point of the AI trade, with strong revenue momentum and a dominant position in high bandwidth memory used for training AI models. Purcell notes that SK Hynix, Samsung and Micron collectively underpin much of the recent semiconductor rally, with SK Hynix now one of the most traded stocks on the Stake platform. She points out that investor enthusiasm around the AI and semiconductor theme appears intact for now.

Purcell flags key risks around SK Hynix’s US-listed ADRs. She states that the ADRs trade at a significant premium to the Korean line, driven by easier access and limited ADR supply on Nasdaq. With mutual conversion between Korean shares and ADRs set to begin on 29 July, Purcell expects arbitrage activity to narrow this premium, potentially pressuring ADR prices, even if some premium persists.

Customer concentration is another concern. Purcell highlights that Nvidia is reportedly SK Hynix’s largest customer, contributing a large share of revenue, with a similar pattern at Samsung and Micron. Any slowdown in Nvidia’s growth or shift in orders could impact earnings. Purcell also notes that SpaceX remains the most traded stock on Stake, despite trading below its IPO price, as investors appear to see value at current levels.