SK Hynix Just Hit a $1 Trillion Market Cap. Here's How You Can Buy the Stock for Around $60.

As one of the big three DRAM chipmakers, SK Hynix (KOSE: A000660) is one of the prime beneficiaries of the trends powering the memory market; it recently hit a market capitalization of $1 billion. However, most U.S. investors have been left out of the chance to own the stock, as it doesn't yet offer American depositary receipts (ADRs). While it has filed to offer ADRs, which could begin trading later this year, there is one easy way to buy the stock right now.

That's through the Roundhill Memory ETF (NYSEMKT: DRAM), which currently trades at around $60 per share. SK Hynix is the exchange-traded fund's second-largest holding, making up 27% of the ETF's portfolio. Fellow DRAM maker Micron Technology is more than 29%, while Samsung is over 19%. You'll also get a little NAND (flash) exposure through Kioxia Holdings and Sandisk, as well as hard-disk drive (HDD) players like Seagate Technology and Western Digital.

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Investing in the leader in high-bandwidth memory

While Micron has been a great way to play the DRAM market, SK Hynix is arguably the market leader. The company pioneered high-bandwidth memory (HBM), which has been the big driver of the market because graphics processing units (GPUs) and other artificial intelligence (AI) chips need to be packaged with HBM for optimal performance.

In the fourth quarter, SK Hynix held a 57% share of the HBM market, and it expects to capture more than 50% market share for the next generation of the technology, HBM4, in 2026. Meanwhile, it's also a close partner with Nvidia, and has secured approximately 70% of the HBM orders for Nvidia's Vera Rubin platform.

The company has been hitting on all cylinders, with Q1 revenue nearly tripling year over year to 52.58 trillion South Korean won ($35.6 billion). Operating profits surged more than 400% to 37.61 trillion won ($25 billion), as operating margins hit an all-time high of 72%.

SK Hynix believes that DRAM will remain supply-constrained until 2030, while demand for HBM will continue to significantly outpace supply over the next several years. It's investing heavily to try and keep up with demand, including 19 trillion won ($13 billion) in a new fabrication plant dedicated to advanced packaging.

Meanwhile, like Micron and Samsung, SK Hynix has also started signing three- to five-year long-term deals with customers. While the memory companies' increased capex spending will trade away some near-term price upside, the strategy increases their visibility in the market and should reduce the large cyclical swings that the DRAM market tends to experience.

While it's a bit more difficult to nail down forward valuation metrics for SK Hynix, it appears to be trading at a forward P/E of less than 7, a solid bargain despite the stock's recent performance. So, if you don't want to wait, an investment in the Roundhill Memory ETF will give you a nice position in this South Korean memory leader.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology, Nvidia, and Western Digital. The Motley Fool has a disclosure policy.