{"id":11519,"date":"2026-07-20T12:37:54","date_gmt":"2026-07-20T07:37:54","guid":{"rendered":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=11519"},"modified":"2026-07-20T12:37:54","modified_gmt":"2026-07-20T07:37:54","slug":"why-the-markets-biggest-winners-look-so-cheap","status":"publish","type":"post","link":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=11519","title":{"rendered":"Why the market&#039;s biggest winners look so cheap"},"content":{"rendered":"<p><script>\r\n  atOptions = {\r\n    'key' : '644b717812d811d6a1c1fc5b6ccd6fa6',\r\n    'format' : 'iframe',\r\n    'height' : 90,\r\n    'width' : 728,\r\n    'params' : {}\r\n  };\r\n<\/script>\r\n<script src=\"https:\/\/www.highperformanceformat.com\/644b717812d811d6a1c1fc5b6ccd6fa6\/invoke.js\"><\/script>\r\n<br \/>\n<br \/><img decoding=\"async\" src=\"https:\/\/graphics.axios.com\/hermesv2\/2026-07-01-1212-largest-10-gainers\/fallbacks\/2026-07-01-1212-largest-10-gainers-fallback.png\" \/><\/p>\n<div>Data: FactSet; Note: As of June 30, 2026 market close; Table: Matt Phillips\/Axios<\/div>\n<p>The market&#8217;s giant winners this year \u2014 memory-related stocks \u2014 also look ridiculously cheap. <\/p>\n<p><strong>Why it matters:<\/strong> Their low price-to-earnings multiples reflect the market&#8217;s worries that the current boom times won&#8217;t last. <\/p>\n<hr>\n<p><strong>Yes, but:<\/strong> Some analysts argue that <em>this time is different<\/em> because of the arrival of AI as a giant new source of demand for memory. They say the market should start valuing memory shares more like other tech companies.<\/p>\n<ul>\n<li>If the memory bulls are right, it could keep the market climbing.<\/li>\n<\/ul>\n<p><strong>Case in point:<\/strong> Take SK Hynix, the South Korean memory chipmaker and market darling that soared more than 500% over the last year.<\/p>\n<ul>\n<li>It just raised $26.5 billion selling U.S. listed depositary shares that investors <a href=\"https:\/\/finance.yahoo.com\/markets\/stocks\/articles\/sk-hynix-nasdaq-adr-offering-115717222.html\" target=\"_blank\">were clambering to get access to<\/a>.<\/li>\n<li>The stock soared on its U.S. trading debut Friday, although it has now tumbled overnight in Seoul.<\/li>\n<\/ul>\n<p><strong>With enthusiasm like that,<\/strong> one might expect a nosebleed level of valuation for the stock. Instead, its price-to-earnings multiple is just seven times.<\/p>\n<p><strong>Zoom out: <\/strong>Same thing here in the U.S., where the two biggest blue chip gainers in the first half \u2014 Sandisk and Micron Technology \u2014 have P\/E ratios that put them in the lowest 20% of the S&amp;P 500.<\/p>\n<p><strong>Context: <\/strong>These low P\/Es reflect the longstanding Wall Street view \u2014 born out by experience \u2014 that memory chips are a highly cyclical part of the tech economy.<\/p>\n<ul>\n<li>In other words, it&#8217;s a business prone to booms and busts, where good times seldom last. (Past downturns have caused <a href=\"https:\/\/archive.nytimes.com\/dealbook.nytimes.com\/2009\/03\/02\/spansion-maker-of-chips-files-for-bankruptcy\/\" target=\"_blank\">bankruptcies<\/a> that basically wiped investors out.)<\/li>\n<\/ul>\n<p><strong>What they&#8217;re saying: &#8220;<\/strong>Multiples are low because of the perceived un-sustainability of earnings,&#8221; says Mark Newman, who covers memory stocks for Bernstein Research. &#8220;I would argue that the multiple is now effectively pricing an imminent collapse in profits.&#8221; <\/p>\n<ul>\n<li>Newman and others think the market is wrong. They say the surge in memory demand shows no sign of slowing down amid the scramble to build AI data centers.<\/li>\n<li>Data centers&#8217; memory demand is different from the traditional big buyers of memory chips, makers of tech devices. They were limited in what they could pay for chips, because consumers wouldn&#8217;t accept sharply higher prices for devices. <\/li>\n<li>&#8220;Smartphones were more price sensitive, so it didn&#8217;t go on forever,&#8221; Newman says of past cycles, adding that &#8220;we&#8217;ve never seen this magnitude of price hikes&#8221; as in the current boom.<\/li>\n<\/ul>\n<p><strong>Reality check: <\/strong>Gil Luria, an analyst covering memory for D.A. Davidson, says the low multiples show that investors don&#8217;t understand how much the business has been transformed by AI. <\/p>\n<ul>\n<li>&#8220;Memory is how AI happens. The GPU can&#8217;t do an AI transaction without memory,&#8221; Luria says, adding: &#8220;We can&#8217;t possibly have enough of it.&#8221;<\/li>\n<\/ul>\n<p><strong>The bottom line:<\/strong> Maybe this time is different. Maybe it isn&#8217;t.<\/p>\n<script async=\"async\" data-cfasync=\"false\" src=\"https:\/\/pl30214220.effectivecpmnetwork.com\/9ab3d4df8a7e1a6171e16ddbf732cc19\/invoke.js\"><\/script>\r\n<div id=\"container-9ab3d4df8a7e1a6171e16ddbf732cc19\"><\/div>\r\n\n","protected":false},"excerpt":{"rendered":"<p>Data: FactSet; Note: As of June 30, 2026 market close; Table: Matt Phillips\/Axios The market&#8217;s giant winners this year \u2014 memory-related stocks \u2014 also look ridiculously cheap. Why it matters: Their low price-to-earnings multiples reflect the market&#8217;s worries that the current boom times won&#8217;t last. Yes, but: Some analysts argue that this time is different&#8230;<\/p>\n","protected":false},"author":1,"featured_media":11520,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/graphics.axios.com\/hermesv2\/2026-07-01-1212-largest-10-gainers\/fallbacks\/2026-07-01-1212-largest-10-gainers-fallback.png","fifu_image_alt":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-11519","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-political-news"],"brizy_media":[],"_links":{"self":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/11519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11519"}],"version-history":[{"count":0,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/11519\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/media\/11520"}],"wp:attachment":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}