Franklin Templeton analysts are warning investors of potential risks in the AI memory chip trade, citing historic highs in valuations for Micron Technology and SK Hynix. The two companies have each reached roughly $1 trillion in market capitalization as of May 2026, driven by surging demand for high-bandwidth memory chips used in AI training and inference.
Market Risks
The combined valuation of Micron, SK Hynix, and Samsung sits at approximately $4.1 trillion, with demand for high-bandwidth memory (HBM) being so intense that SK Hynix and Micron's combined output is essentially spoken for through the end of 2026.
Cycle Concerns
Franklin Templeton analysts are concerned that the current demand may not be sustainable, and that the future is already priced into valuations that have moved at a pace that memory chip stocks historically do not sustain. Memory semiconductors have a well-documented rhythm, where demand spikes, manufacturers build capacity, supply outpaces demand, and prices fall hard.
Broader Implications
The warning from Franklin Templeton analysts may have implications for crypto investors, as sentiment in crypto markets correlates with broader risk appetite. When large-cap tech and semiconductor names are doing well, institutional appetite for risk-on exposure tends to stay elevated, benefiting digital assets like Bitcoin.
Based on reporting from cryptobriefing.com.
