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This is not just a fundraising move, but also a strategic play to capture the attention of AI investors.

Original Article Title: "Largest Ever Overseas Company Fundraising in U.S. Stock Market History! 'Storage Giant' SK Hynix to Land on Nasdaq This Friday"
Original Article Author: Dong Jing, Wall Street News

SK Hynix will debut on Nasdaq in the form of ADR on July 10th, raising $29 billion. This listing will maintain its original listing status on the Korean Exchange while opening a direct entry channel for U.S. investors. It is also expected to be included in the Nasdaq 100 Index, triggering passive fund systemic buying and attracting arbitrage funds to actively trade between ADRs and Korean local stocks, thereby driving valuation closer to its U.S. peers.

The South Korean memory chip giant SK Hynix is about to complete a record-breaking U.S. stock market listing, which is not only a fundraising action but also a strategic layout to attract AI investors' attention.

On July 5th, according to Bloomberg, SK Hynix will complete a $29 billion U.S. stock market listing this week and is expected to begin trading on Nasdaq on July 10th (Friday), potentially becoming the largest ever overseas company fundraising in U.S. stock market history. This listing will be in the form of American Depositary Receipt (ADR), maintaining its original listing status on the Korean Exchange while providing a direct entry channel for U.S. investors.

The core logic of this listing lies in valuation reassessment. SK Hynix is currently trading at a forward 12-month P/E ratio of 6.2 times, lower than its U.S. peer Micron Technology's 7 times, which surpassed 11 times before on June 22nd this year.

According to tech media outlet The Information, based on the forward P/S ratio, SK Hynix stands at 3.6 times, also lower than Micron's 4.6 times, and is trading at a discount based on the P/B ratio. Analysts say that after landing on Nasdaq, SK Hynix is expected to be included in the Nasdaq 100 Index, triggering passive fund systemic buying and attracting arbitrage funds to actively trade between ADRs and Korean local stocks, thereby driving valuation closer to its U.S. peers.

Explosive Growth in Performance, AI Demand Driving Valuation Reshaping

SK Hynix's listing timing aligns closely with its explosive performance growth.

According to The Information, SK Hynix's revenue is expected to grow by about 200% between 2023 and 2025, achieving another around 200% growth in the first quarter of 2025, with the stock price surging nearly 800% over the past 12 months.

According to Bloomberg, SK Hynix expects its net profit to reach 221 trillion South Korean won (approximately $144 billion) in 2026, a 415% year-on-year increase. Its sales are projected to reach 355 trillion South Korean won (approximately $231 billion), a 265% year-on-year increase. Meanwhile, Micron Technology is expected to see a massive 876% year-on-year surge in net profit to around $83 billion and a 247% growth in sales to $130 billion for the current fiscal year ending on August 31.

On a more macro industry level, storage and storage-related stocks are currently experiencing a historic bull market. Over the past 12 months, both SK Hynix's South Korean listed stock and Micron's stock price have surged by about 700%, with both companies' market capitalization exceeding $1 trillion. During the same period, the Philadelphia Semiconductor Index rose by 125%, just concluding its strongest quarterly performance ever.

Notably, SK Hynix has long been an almost "untouchable" target for most U.S. investors. Holding its South Korean listed stock requires operating during U.S. non-trading hours, and the existing unsponsored ADR over-the-counter trading liquidity is extremely limited, with performance consistently lagging behind the local Korean stocks.

Among the world's three major memory chip manufacturers, only Micron Technology is currently listed in the United States, while the other two—SK Hynix and Samsung Electronics—are South Korean companies. SK Hynix's Nasdaq listing will directly change this landscape, allowing U.S. investors to participate in AI storage chip investment opportunities in a frictionless manner during regular trading hours.

Thornburg Investment Management portfolio manager Di Zhou stated, "This offering is aimed at investors who currently cannot access the Korean stock market. SK Hynix's Nasdaq listing provides a direct, unimpeded exposure to the most compelling pure-play asset in the AI storage cycle."

Index Inclusion and Arbitrage Opportunities, Dual Catalysts Await Release

According to Bloomberg, one significant potential benefit of this listing is that SK Hynix will become eligible for inclusion in U.S. stock indices, triggering systematic buying from passive management ETFs.

For example, considering the Invesco QQQ Trust that tracks the Nasdaq 100 Index, which has assets under management of $482 billion, once SK Hynix is included in the index, substantial passive fund inflows will follow.

Meanwhile, the price difference between ADRs and South Korean local stocks will provide arbitrage opportunities for hedge funds. Brendan Ahern, Chief Investment Officer of KraneShares, stated:

“Due to the cross-market structure, there may be a premium or discount between the two, which will attract arbitrageurs and improve stock liquidity.”

This arbitrage logic has been previously validated in the U.S. listings of Alibaba and TSMC. Currently, TSMC's ADR trades at an average premium of over 21% to the South Korean local stock in the past year, currently around 13%. Whether SK Hynix's ADR can be freely exchanged for South Korean local shares will be a key variable determining the sustainability of the price difference and the construction of arbitrage strategies.

Bubble Concerns and Cyclical Risks Not to Be Ignored

Despite the bullish market sentiment, some investors remain cautious about the risks in this space.

Ed O'Gorman, CEO of River Wealth Advisors, warned, “Investors face the risk of entering a potential speculative bubble, and must be very cautious with any stock that has seen such a significant increase.”

Kim Forrest, Chief Investment Officer of Bokeh Capital Partners, stated that she is waiting on the sidelines due to several governance differences in ADR listings but expects a significant amount of peer demand. Daniel Morgan, Senior Portfolio Manager at Synovus Trust, said, “This will be a very popular offering, and we need to wait until it officially goes public to make a decision.”

Furthermore, the storage chip industry is known for its intense cyclical nature. Just three years ago, both Micron and SK Hynix incurred losses due to a sharp drop in demand and chip prices. The current main drivers of demand—Alphabet, Microsoft, and other tech giants—are increasingly relying on debt and equity financing to support data center capital expenditures, and once this spending pace slows down, the industry's profit logic will undergo a fundamental shift.

Meanwhile, last week saw a collective pullback in storage chip stocks, with market concerns possibly stemming from potential oversupply. This fluctuation reminds investors that while SK Hynix is priced at a discount relative to Micron, the high volatility of chip stocks should not be underestimated.