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The stock market’s most hyped offerings this year have struggled since their debut.
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SK Hynix is the latest example, with the US-listed ADRs down 10% in their second day of trading.
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The hottest IPOs have arrived at an awkward moment in the market as investors reassess the AI trade.
Some of the hottest new listings are having trouble keeping the momentum going after much-hyped debuts.
SK Hynix is the latest example of a stock struggling after a splashy initial offering. While technically not a new IPO, momentum behind the South Korean chipmaker’s American depositary receipts has fizzled in the days since they were priced last Thursday.
The ADRs fell by nearly 10% on Monday after a brutal day of selling dragged the Korean-listed shares down 15%. While the ADRs are still trading slightly above the offering price of $149, they’ve tumbled sharply from Friday’s high around $175 as the chip trade struggles and memory makers fight against downward momentum that recently pushed the sector into a bear market.
But SK Hynix is only the latest example of an offering that rocketed higher before eventually running out of steam this year.
SpaceX — which garnered a nearly $2 trillion valuation and marked the biggest IPO of all time — saw shares soar as much as 25% in the days that followed the offering. The stock is now down almost 40% from its peak, trading below the $150 level at which trading began on June 12, and nearing the $135 IPO price.
Cerebras, an AI semiconductor maker, has also seen its stock struggle after a strong debut. The stock jumped 68% in its first day of trading, kicking off the wave of mega-IPOs expected in 2026. As of Monday, the stock is down 40% since it began trading on May 14.
Stocks are often volatile after their IPOs as shares go through a period of price discovery. The problem with buzzy tech IPOs is also that they’re coming at an awkward time for the market as AI hype that once seemed endless cools off.
SK Hynix priced its US offering right as the sector struggled against a bear market slide that sent some of the hottest stocks tumbling, including Micron Technology and Sandisk.
Meanwhile, there’s growing concern that the bar for more AI-fueled stock gains is higher heading into this earnings season. Unexpectedly strong results in the first quarter lifted the market, but companies will need to do more than simply beat earnings to keep gaining. That was illustrated most recently by Samsung, another darling of the AI memory trade, which reported stellar results by most metrics but saw its stock plummet as a result.
