DRAM’s Success Leaves Investors Looking for the Next Bottleneck Trade 

Roundhill Investments’ Memory ETF (DRAM) recently did what many analysts thought was impossible.

The fund first rivaled and then surpassed new-issue growth records previously set by the mighty iShares Bitcoin Trust ETF (IBIT). Specifically, it managed to pull in a record $6.5 billion in assets over its first 36 trading days and is now sitting at a healthy $10 billion. That success, according to analysts, is the latest sign of ballooning investor confidence in artificial intelligence and data center construction, which is supercharged by serious supply constraints in the memory chip manufacturing sector. Investors, as they are wont to do, are already on the lookout for the next bottleneck trade that could deliver DRAM-like performance, and one potentially fruitful area is photonics.

Photo, What Now?

For those of us who fell asleep in science class, photonics is a multidisciplinary domain that involves the generation, control, manipulation and detection of light. Some experts argue the massive internet bandwidth demands of the AI revolution will catapult fiber-optic manufacturers into the spotlight, per an ETF.com report.  

The recent launch of the Corgi Lithography & Semiconductor Photonics ETF (EUV) could be a test case: 

• The asset manager broke a single-day launch record when it rolled out 34 ETFs earlier this month, and EUV was one of them. 
• However, the fund has been slow out of the gate, collecting just $57 million in assets, although some may say it’s just ahead of its time. 

Hey, ChatGPT: In addition to photonics, what are some other potential bottleneck trade themes, you ask? Well, one popular AI tool came up with a surprising answer that may need fact-checking. “Advanced packaging is one of the most ‘inside baseball’ bottlenecks,” it said. “The issue isn’t only making AI chips — it’s packaging them together with memory at scale.” 

Man, we miss the em dash.