Meet the Roundhill ETF With 26% of Its Assets Parked in Micron Technology Stock

econews. Memory is a critical part of the artificial intelligence (AI) hardware stack in data centers, computers, smartphones, and even cars. It keeps data constantly flowing to processing chips during AI model training and inference workloads, preventing bottlenecks. Without sufficient memory capacity, users of AI chatbots, AI agents, and even self-driving cars would have a very laggy experience.

In April, Roundhill Investments launched an exchange-traded fund (ETF) that exclusively invests in memory stocks called the Roundhill Memory ETF (DRAM+0.69%). It has already delivered an 80% return in just four months.

The ETF has more than one-quarter of its assets allocated to America's top memory company, Micron Technology (MU+2.30%), which has been a key driver of its returns. Should investors add this fund to their portfolio now, or have they missed the boat?

Every leading memory stock is packed into one ETF

Data center operators are currently buying high bandwidth memory (HBM) hand over fist to power their AI workloads. It's causing a global shortage across all memory types because suppliers are reducing manufacturing capacity in some segments to prioritize HBM.

This is creating a bonanza for companies like Micron and its main competitors, Samsung Electronics and SK Hynix, because the shortage allows them to dictate prices. As a result, all three are experiencing blistering increases in revenue and earnings. Shareholders are reaping the rewards, with Micron stock soaring by over 600% over the last 12 months alone.

The Roundhill Memory ETF holds 24 stocks, but Micron, Samsung, and SK Hynix, its top three holdings, account for a whopping 70.9% of the portfolio's value.

Micron, Samsung, and SK Hynix are racing to produce as many of their new HBM4 data center chips as possible, which offer record capacity specifically for AI workloads. Micron's HBM4 delivers 60% higher performance than its previous HBM3 solution and is 20% more energy-efficient. This is an ideal combination for data center operators seeking the fastest processing speeds at the lowest cost.

The memory shortage is so severe right now that Nvidia is sourcing HBM4 from all three suppliers for its new Vera Rubin systems, which include its Rubin graphics processing units (GPUs), Vera central processing units (CPUs), and specialized networking equipment. These systems are now the gold standard for running AI workloads.

Outside of its top three positions, the Roundhill ETF also holds prominent memory and storage names like Seagate Technology Holdings, Western Digital, and Sandisk.

The Roundhill ETF is obliterating the market, but can it continue?

The Roundhill Memory ETF only launched on April 2, so it doesn't have much of a track record for investors to consider. But as mentioned, it has already rocketed up by 80%, obliterating the broader market so far.