MU, SSNLF, and SK Hynix Stocks Rally as HBM Shortage Creates Concentration Risk
As the world’s insatiable appetite for artificial intelligence (AI) continues to be in short supply around the world, a few companies are reaping profits so large that they have rekindled investor concerns about an impending AI bubble.
Last month, the number of publicly traded companies in the $1 trillion market club grew from 10 to 13.
The first new member arrived at the time was Samsung Electronics OTCMKTS: SSNLF surpassed the historic benchmark, becoming the second Asian company to do so, following Taiwan Semiconductor Manufacturing Company NYSE: TSMsurpassing $1 trillion by July 2025.
Soon after, two companies whose stocks rose last year joined the club: Micron Technology NASDAQ: MU and South Korean semiconductor company SK Hynix (which does not trade directly on major US exchanges).
With memory chip shortages driving this trend that is expected to endure for at least another year, if not, any shocks to other aspects of the AI business could have negative consequences for companies in the high-bandwidth memory (HBM) space.
HBM Demand Increases Concentration Risk in South Korea’s Stock Market
Shares in SK Hynix have gained more than 1,000% in the past year, making Samsung’s gain of more than 458% during the same period pale in comparison. Their combined market capitalization now stands at nearly $2.5 trillion.
As of May 27th, those two companies together now account for an unprecedented and deep about 50% of the total market capitalization of South Korea’s benchmark Korea Composite Stock Price Index (KOSPI). For context, at the end of May, the Magnificent Seven accounted for nearly one-third of the S&P 500.
In itself, that level of concentration risk is worrisome. But adding a layer of AI-driven extremes and highly dependent revenue growth compounds those concerns.
To show just how good that growth has been, Samsung has seen its total revenue grow by nearly 37% from 2018 to 2025. However, the Device Solutions division—the firm’s business unit responsible for global semiconductor and component operations—saw revenue grow more than 95% through 2023.
Investor flows tied to short-term and long-term trends in HBM can have a significant impact on the broader index. That concentration means that an entry or exit driven by HBM can equally affect the performance of the other 836 companies in the benchmark.
Metrics suggest Micron is Financially Healthy and Undervalued
Despite a nearly 1,000% gain over the past year, Micron trades at a trailing 12-month price-to-earnings (P/E) ratio of about 45 and a forward P/E ratio of about 17.
Price chart of Micron Technology, Inc. (MU) for Monday, June, 1, 2026
That makes the stock cheap by most Wall Street standards, regardless of how much the price has risen since early April 2025, when it was trading about 1,400% below what the shares are trading at today.
Meanwhile, the company’s debt-to-equity (D/E) ratio dwarfs that rivalry. In general, a D/E ratio below both indicates a company with financial stability and conservative management. The S&P 500’s D/E ratio is 0.65, while Micron’s is only 0.13.
Micron Technology Stock Forecast Today
$621.97
-39.78% LowBuy it
Based on 39 Analyst Ratings
| Current Price | $1,032.75 |
|---|---|
| High Forecast | $1,750.00 |
| Average prediction | $621.97 |
| Low Prognosis | $155.00 |
Micron Technology Stock Forecast Details
That, among other factors, has kept Micron in the good graces of analysts. 39 analysts currently covering MU have given the stock a consensus rating of buy.
UBS, for example, recently issued a structural upgrade, raising its one-year price target for Micon from $535 to a Wall Street high of $1,625.
The central argument is that Micron predicts it will generate more than $400 billion in free cash flow from 2027 to 2029.
But from an earnings per share (EPS) perspective, there are reasons for concern. After EPS contracted by nearly 169% in 2023, it grew by more than 113% in 2024 and more than 984% in 2025 despite revenue growth declining from about 62% in 2024 to about 49% in 2025.
That’s mostly due to the company’s records, though. Micron’s guidance projects an unprecedented cash margin target of 81%, and Q2 free cash flow has reached $6.9 billion.
Meanwhile, the Memory Chip Shortage Has Legs
The global HBM shortage is expected to continue until at least 2027, with many forecasts indicating that it may extend into the 2030s.
While the recent performance of Samsung, SK Hynix, and Micron leaves the companies looking like they are ready for a correction, the macro reality suggests that the trend is stable in terms of inventory shortages.
Together, those three companies supply about 95% of the world’s memory chips. And despite it still being the first half of 2026, all three companies said their production capacity for the entire year has been sold, meaning they can charge premiums for their products, expanding their margins.
SK Hynix executives warned that the HBM wafer shortage could last up to five years. And all three companies have pivoted production to meet existing demand, leaving a shortage of consumer electronics (eg, laptops and smartphones), experiencing supply constraints and rising prices.
Much of that is driven by hyperscalers like Alphabet NASDAQ: GOOGLMeta Platforms NASDAQ: METAand Microsoft NASDAQ: MSFTsecured HBM’s large production capacity through long-term contracts with Samsung, SK Hynix, and Micron.
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