The Roundhill Memory ETF (CBOE: DRAM) recorded its biggest daily outflow on Wednesday last week as challenges in the memory industry continued. Outflows exceeded $481 million, compared with $281 million a day earlier. The fund lost more than $2.24 billion in assets over the past 30 days, reducing assets under management to $20.2 billion. The fund held over $26 billion at its peak, when demand and stock prices were rising.
The ETF continued falling as memory companies slumped, reaching its lowest level since July 29. The ETF dropped to $46.45, down 43% from its all-time high. The decline coincided with continuing outflows as investors exited positions.
Samsung Electronics, South Korea's largest company, fell to 215,500 won, down 42% from its all-time high. Samsung's market capitalization declined from $1.9 trillion to $1.05 trillion today. SK Hynix, a leading high-bandwidth memory company, has also declined since June. Other major ETF constituents, including Micron, SanDisk and Western Digital, have followed the same downward trend.
The DRAM ETF's decline has been more severe than declines in other funds because of concentration in the memory industry. Every company in the fund operates in some part of the memory sector. Samsung, Micron and SK Hynix, the three largest holdings, account for over 75% of the fund, creating significant concentration risk.
The outflows have continued amid fears of an artificial intelligence bubble. The AI Bubble Index has risen to 74. Analysts including Michael Burry and Ray Dalio have warned that the bubble may burst soon. Dalio has cited rising interest rates and bond yields. Gartner recently warned that major investors in the AI industry will need to announce substantial markdowns by the end of 2030. Such markdowns will affect demand for memory and other items. Analysts also warn that Chinese competitors such as CXMT will gain market share over time.
However, memory companies are reporting some of the industry's strongest revenues. Micron's fourth-quarter revenue rose 379% to $54 billion. Samsung reported an $80 billion profit. China's CXMT recorded a sevenfold revenue increase as demand for CXMT's memory solutions rose.
Memory companies are also highly undervalued. Micron has a forward price-to-earnings ratio of 4.98%. SanDisk has a forward price-to-earnings ratio of 6. Western Digital has a price-to-earnings multiple of 16.
DRAM ETF Sees $481M Daily Outflow Amid AI Bubble Fears
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Summary
DRAM ETF Sees $481M ETF outflows Amid AI Bubble Fears. The Roundhill Memory ETF (DRAM) recorded its largest daily ETF outflow of $481 million on Wednesday last week. The fund has lost over $2.24 billion in assets in the past 30 days, with its value down 43% from an all-time high. Analysts warn of an AI bubble, with the AI Bubble Index at 74. Major investors may announce markdowns by 2030. Memory companies like Micron and Samsung reported strong quarterly revenues.
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