SK Hynix, a South Korean chipmaker, is set to make its US trading debut on Friday following a $26.5 billion share sale. This debut will be a key test of investors’ belief in the durability of the AI boom, coming after a recent pullback in semiconductor stocks.

AI Boom and Semiconductor Stocks

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 650% higher than a year ago.

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. SK Hynix shares rose 2.2% to 2.233 million won ($1,479.98) in Seoul on Friday after it sold American Depositary Receipts at $149 apiece, a 2.7% premium over its average share price in the last three trading days.

Investor Interest and Valuations

The offering, the second-largest share sale in the US after SpaceX’s record IPO last month, will bring in funds for SK Hynix to build new factories and give the chipmaker direct access to the world’s largest pool of investors. This is the purest large-cap way for US investors to own the AI-memory theme, and Hynix deliberately picked Nasdaq to tap that demand and the higher valuations US chip names command versus Seoul.

SK Hynix gets its deal done on the strength of the story, but companies coming after it may face a tougher, more selective market. The Icheon, South Korea-based company is the world’s biggest maker of high-bandwidth memory (HBM) chips, which are essential for the vast amounts of data processing in AI-focused graphics processing units (GPUs) produced by the likes of Nvidia and AMD.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.