It's not too late to start buying the data center winners. Here's why
Late. Late. Late. That's how I felt when I saw the Roundhill Memory ETF — symbol DRAM, of course — take in more than $5 billion in a month. Super late when I saw it took in $1.1 billion on Thursday alone, all to play...
$4,200-$4,600 — Gold (GC) Where to settle in June?
An important development from the financial markets: That's how I felt when I saw the Roundhill Memory ETF — symbol DRAM, of course — take in more than $5 billion in a month. Super late when I saw it took in $1. 1 billion on Thursday alone, all to play what the press is hailing as the memory supercycle.
But then I look at its core holdings like SK Hynix, Micron , Samsung, Sandisk , Seagate , Kioxia and Western Digital , I say to myself this is a cocktail of high octane the world has never seen before. And a fantastic way to get exposure to the makers of memory all over the globe, including some not listed on American exchanges. The Korean companies are on fire.
Economic Details
The Japanese firms are on fire. That billion that was invested on Thursday, maybe that was the smart money. Rather than late, I think that if you own this ETF you have everything that represents the incredible bottleneck of ever-rising prices where the customers can't say no thanks to the demands of AI computing.
How can you say no to those kinds of investments? How do you say no to the insatiable? I am reading my old friend Herb Greenberg's Substack newsletter, Red Flag Alerts, and what does he focus on this week?
Modine Manufacturing . I know it is a smoking-hot company from its gorgeous stock chart and I know it has a tremendous reputation in heating and cooling. Modine says it has built really strong relationships with the hyperscalers.
Analyst Views
But Herb talks about how it hasn't been exactly straightforward with its transformation and how risky it's become. It does seem a little headlong. But the more I look at it, the more I think it hasn't really been discovered yet.
I dig deeper and I can't believe how much these hyperscalers seem to love the company, even as Herb says that they might not even have any of these hyperscalers as clients. I'll take the other side of the trade. Modine Manufacturing is a buy.
It sounds as good as Vertiv or Club name Eaton , two data center suppliers, except a little less discovered. Certainly better than Carrier , which has too much residential HVAC exposure. Plus, Modine got rid of all the slow-growing industrial.
Financial markets are tracking the development closely as investors assess the likely impact.
