'Biggest bottleneck in the AI buildup' fuels DRAM ETF to record

The Roundhill Memory ETF (DRAM) has achieved a remarkable milestone, amassing $9.8 billion in assets under management in just 43 days. This marks the fastest growth ever recorded for an exchange-traded fund, as reported by TMX VettaFi. According to Dave Mazza, CEO of Roundhill Investments, this rapid ascent is largely driven by a shortage of companies producing high-bandwidth memory or DRAM chips, which are vital for the burgeoning artificial intelligence sector. In an interview with CNBC's "ETF Edge," Mazza emphasized that the primary challenge in advancing AI technology is the availability of memory chips. He stated, "There's an incredible amount of supply and demand imbalance with memory which is one of the reasons why the stocks have been performing so well." Mazza highlighted that only a few firms are involved in the production of these critical memory chips, an industry that has historically experienced significant fluctuations. He noted that memory is ubiquitous, found in devices ranging from smart TVs to smartphones and automobiles. However, the landscape has shifted due to the explosive growth of data centers and the expansion of AI technologies. The imbalance between supply and demand is expected to persist into 2028, driven by the increasing requirements of AI and the expansion of data center hyperscalers. Todd Rosenbluth from TMX VettaFi expressed surprise at the ETF's swift adoption, likening its popularity to the previous bitcoin craze. He remarked, "Thematic ETFs continue to gain traction by offering exposure to fast-growing companies." Citi Research's Drew Pettit is optimistic about the ETF's continued success, noting that the price momentum is supported by strong earnings growth. "If we're up 300%, but your earnings expectations are up six-to-eightfold for the next few years, it still comes back reasonably priced to us," he explained. Despite facing pressure during Friday's trading session, the DRAM ETF has seen an impressive rise of over 80% since its inception, underscoring the strong market interest in memory stocks amidst the AI revolution.