The term “paradigm shift” is often casually applied to what might simply be a rapid rotation between trendy assets, the latest example being the AI-driven semiconductor boom.
Hyperscalers such as Amazon (AMZ) and Google (GOOG) are spending heavily on data centers containing thousands of AI accelerators. These systems require huge amounts of high-bandwidth memory for processing and NAND flash for storage, which tightens supply and increases chip prices.
Micron Technology (MU) produces DRAM, NAND and other memory products, while Sandisk (SNDK) specializes in NAND flash and SSD storage. Micron is up about 700% year over year and Sandisk is up more than 4,000%. Both then retreated from their highs, illustrating how quickly enthusiasm can reverse.
The craze resulted in the largest U.S. IPO of all time in SpaceX (SPCX), while SK Hynix (00060), a leading provider of high-bandwidth memory, raised $26.5 billion in the largest U.S. listing ever by a foreign company. Its ADRs initially jumped, but subsequent volatility exposed the risks of buying on maximum optimism, with SK Hynix down 15% during Asian market hours.
