The Roundhill Memory ETF (DRAM) has become the hottest fund in the United States this year.

Launched in April, it has surged by over 80% and attracted nearly $10 billion in assets under management (AUM).

It has had inflows in each week since its launch as investors piled into the top gainers in the stock market this year.

DRAM ETF is experiencing phenomenal growth amid FOMO

The Roundhill Memory ETF, which has an expense ratio of 0.65%, is firing on all cylinders, and it is easy to see why. It tracks some of the best-performing companies globally this year.

According to its website, SK Hynix, the giant South Korean company, is the biggest part of the fund with a 28% share.

It is followed by Micron, the leading player in the DRAM and NAND industries, which has a 26% share. 

Samsung Electronics, which recently hit a market capitalization of $1 trillion, has a 20% share.

The other smaller constituent companies in the fund are companies like Kioxia, Sandisk, Seagate, Western Digital, Nanya Technology, and Winbond Electronics.

All these are some of the best gainers this year. Sk Hynix has jumped by 177% this year and is up by over 770% in the last 12 months.

Micron has pumped by 162% this year, while Samsung Electronics soared by 124%. Most importantly, SanDisk has jumped by 465% this year.

Therefore, the ongoing DRAM ETF demand is happening as investors chase the ongoing rally amid the AI boom.

Most analysts believe that demand for memory and other chips will continue rising in the coming years as companies boost their AI spending.

The top companies in the United States have hinted that they will spend as much as $725 billion this year.

At the same time, these companies have all published strong results recently.

For example, the most recent results showed that SK Hynix’s revenue jumped by 198% YoY, while its net income soared by 165%.

The management also boosted the forward guidance, pointing to more demand. 

Micron’s results revealed that its revenue jumped to over $23 billion, up sharply from the $8 billion it made in the same period a year earlier.

The other companies in DRAM have also released strong numbers and boosted their estimates. 

What next for the DRAM stock?

The DRAM stock price may continue to rise this year as the respective stocks surge amid the rising demand.

Most analysts always recommend against going against the trend, especially in periods of extreme exuberance. 

There are also no indications that the memory demand is fading. Indeed, most reports released this year show that the industry will continue to fire on all cylinders, as the companies don’t have the capacity to boost their demand. 

In the long-term, however, there is a risk that the ETF will reverse as it faces several risks.

The first major risk is its concentration, where three companies account for 75% of the entire fund.

This is risky because if one of them drops, it will have a negative impact on the whole fund.

There is also a risk that the ETF is highly overvalued, with some of these companies trading at elevated multiples. 

Most importantly, history shows that FOMO periods don’t end well.

We saw this well during the meme stock era in 2021 when many investors were rushing to companies like GameStop, AMC, and ContextLogic, the parent company of Wish.com. All these stocks have plunged from their highs at the time. 

This view is usually explained using the Dow Theory and the Wyckoff Theory.

These theories suggest that financial assets go through different stages, with the current one being the markup.

It will next enter the distribution and markup phases, which are characterized by panic selling among investors. 

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The FTSE 100 Index has been muted in the past few weeks despite major developments in the UK, including the ongoing political crisis in which Keir Starmer is fighting for his political survival. It also reacted mildly to the recent corporate earnings and Bank of England decision. 

This article explores some of the top FTSE Index shares to watch next week, including BT Group, EasyJet, Sage Group, British Land, and Marks and Spencer.

BT Group will be the top FTSE 100 stock to watch

BT Group, the biggest telecom company in the UK, will be the top name to watch next week as it publishes its annual results. These numbers come at a time when the stock has jumped to its highest point since 2018. 

The stock’s rally continued after the company published its trading statement. It noted that its Openreach broadband lines would drop by 850k for the year, much better than what analysts were expecting. 

At the same time, demand for Openreach FTTP continued rising, with the total premises connected rising to over 8.2 million. The average revenue per user rose by 4% to 16.8 pounds.

Analysts expect the upcoming results to show that its total revenue dropped by about 3% for the full year. It will offset this decline with an increase in profits, helped by its cost cut initiatives. 

EasyJet to shed light on its business amid the war

It has been a tough time for low-cost airlines as the soaring costs have made it hard for their operations. For example, analysts blamed the Iran war for exacerbating the Spirit Airlines collapse. Jet fuel prices have soared, and there are warnings of potential shortages.

EasyJet share price has been in a strong freefall, and is now trading at its lowest level since January 2023. It has slumped by over 40% from its highest point in December 2024. 

The company will publish its earnings on Thursday next week, providing more color on what to expect as the war continues. It has hinted that it will report a big loss of between 540 million and 560 million pounds for the first half of FY’26. 

Sage Group to defend its business amid AI disruption fears

Meanwhile, Sage Group will be in the spotlight next week as it releases its earnings. The accounting software maker will be put to task to defend its business model amid the rising concerns that AI will disrupt its business. 

These fears explain why the stock has plunged by 35% from its highest point last year. Other software companies like Intuit have also plunged, a move that accelerated after Anthropic launched several solutions aimed at corporate clients. 

Sage and other companies have argued that AI will be a positive catalyst for their businesses. The argument is that its AI tools will improve the productivity of their clients in the long term. Analysts expect its results will show that revenue rose by 10% in the first half to 1.35 billion pounds.

Marks and Spencer

Marks and Spencer shares have come under pressure in the past few months. It has dropped in the last four consecutive weeks and is now trading at its lowest level in years. 

The company will publish its full-year results on May 20th, providing more information about its business and the health of the UK retail sector. Its recent trading statement showed that its food business was doing well, but was being dragged by its fashion, home, and beauty businesses. 

The other FTSE 100 shares to watch next week will be British Land, Tesco, AutoTrader Group, Experian, and AJ Bell.

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The Rolls-Royce share price remains on edge this year as investors continue their focus on the ongoing US-Iran war that is having a major negative impact on the civil aviation industry. RR dropped to 1,200p today, down sharply from the all-time high of 1,420p, which it reached in February this year. So, is it safe to buy the dip or just stay away?

Rolls-Royce share price is stuck in a correction amid elevated risks

The RR stock price has pulled back sharply this year,  a trend that coincides with that of other similar companies. For example, GE Aerospace stock has tumbled by 15% from the year-to-date high of $348, while Safran has plunged by over 20% from its highest point this year.

The stocks have all dropped because of the ongoing US-Iran war that has impacted the civil aviation industry negatively, with some airlines cancelling their flights. There are also warnings that some airlines, especially in Europe, will experience a jet fuel shortage if the war continues.

Still, Rolls-Royce Holdings has moved to calm the market noting that its business was still firing on all cylinders despite the challenges. In a statement, the company maintained its forward outlook, noting that it was working to fully mitigate the financial impact of the disruption.

As a result, the management maintained the forward guidance, noting that it will still hit the operating profit of between £4 billion and £4.2 billion this year and free cash flow of between £3.6 billion and £3.8 billion.

City analysts are optimistic that Rolls-Royce’s business will continue doing well in the long term. Besides, the company survived the Covid-19 pandemic when the global travel industry stalled.

The average estimate is that its revenue will hit £22.7 billion this year, with its underlying profit before tax (PBT) rising to £4.09 billion. Its revenue is expected to surge to £27.54 billion in 2028, helped by the robust civil aviation industry and its other initiatives. The FCF is expected to jump to over £5.15 billion in that year.

RR stock valuation estimates

Rolls Royce stock is relatively undervalued compared with that of GE Aerospace. It has a forward price-to-earnings ratio of 18, much lower than GE’s 34.8. 

By using the forward estimates, the company has a forward PE ratio of 34.7, lower than GE’s 37. Its EV/EBITDA of 20.9 is also lower than GE’s 27.5. 

However, a DCF calculation shows that the company is relatively overvalued. It shows that the ideal price is about 928p, much lower than the current 1,200p. Also, its general valuation multiples shows that it is overvalued compared to the broader market.

Rolls-Royce stock price analysis

RR stock chart | Source: TradingView

The weekly chart shows that the RR stock price has jumped in the past few years, reaching its all-time high of 1,420p earlier this year. It then started pulling back after the start of the ongoing Iran war. 

Still, on the positive side, it remains above the 50-week Exponential Moving Average, which has provided it with strong dynamic support. It has also formed a small double-bottom pattern at around 1,100p level. 

Therefore, the stock will likely bounce back in the coming weeks, and possibly retest its all-time high of 1,420p. However, a drop below the support level at 1,100p will invalidate the bullish outlook and point to a drop below 1,000p.

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BT Group share price continued its strong bull run, reaching its highest point in over seven years as its full-year earnings loomed. It jumped to 240p, up by over 140% from its lowest point in 2024. 

BT Group shares are soaring ahead of earnings

BT, the top telecom company in the UK, has done well this year, as investors predict that its turnaround efforts will work out. Also, unlike other companies, it is not heavily exposed to the ongoing geopolitical issues in the Middle East.

The next important catalyst for the stock will be its full-year earnings report, which comes out on May 21st. According to its latest consensus, the company’s annual revenue is expected to come in at 19.6 billion pounds, down by 3.4% from the last financial year.

Most of its segments are expected to record a deterioration, with its consumer revenue falling to 9.523 billion pounds. The business and its international segments are expected to slow to 5.2 billion and 2.16 billion pounds, respectively.

The only business expected to grow is its OpenReach brand, which connects most homes in the UK through its fibre. Its revenue is expected to come in at 6.17 billion pounds from the previous 6.15 billion a year earlier. 

BT’s profit, on the other hand, is expected to continue growing. The closely-watched EBITDA figure will come in at 8.214 billion from the previous 8.209 billion pounds. 

The company has used several approaches to improve its profitability. It has reduced its capital expenditure, which peaked a few years ago amid the Openreach rollout, and announced plans to slash workers.

BT Group faces some major challenges. The most notable one is the deterioration of its business segment, whose legacy solutions like landlines and networking are slowing. Competition in the industry has continued rising.

At the same time, the company’s broadband service has continued to lose substantial subscribers. In the last trading statement, the company said that its annual churn this year will be over 800,000 customers, lower than the over 1 million that analysts were expecting. 

BT share price has more upside to go

BT Group stock chart | Source: TradingView

The weekly chart shows that the BT Group stock has been in a strong bull run in the past few months. It recently crossed the important resistance level at 207p, the upper side of the cup-and-handle pattern, a common continuation sign. 

The cup has a depth of 105p (207p minus 102p). Therefore, adding this number to 207p gives the target price at 309p. Such a move would be a 30% upside from the current level. 

The bullish outlook is also being supported by other indicators. For example, it remains above all moving averages, a sign that bulls are in control. 

Additionally, top oscillators like the Relative Strength Index (RSI) and the MACD have continued rising. It also remains above the Ichimoku cloud and the Supertrend indicator. 

The only caveat is that this outlook is based on the weekly chart, meaning that the target may take weeks or months to be achieved. 

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The FTSE 100 Index retreated for the fourth consecutive day, reaching its lowest level since March 30th. It has dropped by over 6.30% from its highest point this year as geopolitical risks jumped.

FTSE 100 Index chart | Source: TradingView

FTSE 100 Index drops amid rising risks in the UK

The FTSE 100 Index retreated sharply on Tuesday, mirroring the performance of other European indices and American stock index futures.

In Germany, the DAX Index dropped by 0.96%, while in France, the CAC 40 fell by 0.65%. The Euro Stoxx 50 Index dropped by nearly 1%

This price action is happening amid the rising concerns that the United States and Iran will go back to war. In a statement on Monday, President Donald Trump said that the ongoing ceasefire was on a massive life support as he rejected Iran’s response to the US offer to end the war.

Iran’s response focused on reopening the Strait of Hormuz in exchange for sanctions relief and a commitment to continuing negotiations on the nuclear weapons program.

There is a possibility that the US and Israel will launch their attacks when Trump returns from China. Such a move would have a major impact on the UK economy, where energy prices have soared in the past few months.

The most recent economic data showed that the headline consumer price index (CPI) jumped to 4.6% in April this year from 3.3% in the previous month. As a result, there are fears that the  Bank of England (BoE) will decide to hike interest rates later this year.

These fears explain why the UK’s borrowing costs have continued rising. The 1-year Gilt yield rose to 5.11%, its highest level since 2008. Similarly, the five-year yield rose to 4.663% from the pandemic low of minus 0.105%.

The FTSE 100 Index is also falling amid the ongoing political crisis after last year’s election, in which the ruling Labour Party suffered a major bloodbath. Keir Starmer, the Prime Minister, is now weighing options on whether to resign or keep pushing on.

Polymarket traders believe that his time as the premier is numbered. 57% of the respondents believe that he will be out by March, May 31st, while 86% expect him to be out by December.

Barclays, NatWest, and Lloyds shares lead losses as energy jumps 

Banks were the top laggards in the FTSE 100 Index today, with Barclays stock dropping by over 4.42%. NatWest dropped by 4.27%, while Lloyds fell by 4%.

UK banks have been highly sensitive to the ongoing Iran war because of its impact on the UK economy and the potential for non-performing loans.

Still, on the positive side, these banks released strong financial results, with Lloyds’ profit before tax rising to £2 billion from the £1.5 billion in the same period last year. Its underlying net interest income rose by 8% to £3.6 billion.

Similarly, Natwest’s net interest income jumped to £3.39 billion from £3.02 billion in the same period a year earlier. Its total income jumped to £4.3 billion, with Barclays ‘ profit before tax hitting £2.8 billion.

On the other hand, Intertek Group’s stock jumped by over 6.5%, making it the best-performing company in the FTSE 100 Index today. Energy companies like BP and Shell jumped by over 2.47% and 1.76%, respectively. This jump happened as the crude oil prices soared, with Brent rising to over $100.

The other top gainers in the FTSE 100 Index were companies like British American Tobacco, London Stock Exchange (LSEG), Coca-Cola, and Unilever.

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The S&P 500 Index jumped to a record high last week, continuing an uptrend that started on March 30 when it plunged to $6,315. It rose to an all-time high of $7,398, adding trillions of dollars in value.

This rally article looks at the potential catalysts for the index and its ETFs like VOO, SPY, and SPYM. 

S&P 500 Index to react to key corporate earnings

Corporate earnings are the top drivers for the ongoing S&P 500 Index rally.

FactSet data shows that the average earnings growth for the 89% of S&P 500 constituents that have published their numbers is 27.7%.

This is a big number that is more than double what analysts were expecting. 

Most companies have recorded strong earnings growth, with top banks like Goldman Sachs and Morgan Stanley being boosted by trading activity.

Many firms have also started seeing a strong AI boost in their earnings reports. 

While some major American companies will publish their earnings this week, the implication on the S&P 500 Index will be relatively limited. 

The main one to watch this week will be Applied Materials, a $369 billion company that publishes its numbers on Thursday.

Ross Stores, Bath and Body Works, Under Armour, Aramark, and Zebra Technologies will also release. 

Next week will see more big and consequential companies releasing their earnings reports. NVIDIA, the biggest constituent company, releases its numbers on Wednesday, while Walmart releases on the following day.

The other top ones to watch next week are Deere, Workday, Zoom, Cisco, TJX, Analog Devices, and Home Depot. 

US Consumer Price Index (CPI) data

The other major catalyst for the S&P 500 Index and its ETFs will be the upcoming US Consumer Price Index (CPI), which comes out on Tuesday this week.

These numbers come as energy prices remain elevated, with the average gasoline price soaring to $4.25.

Analysts are warning that prices will continue rising amid elevated inventory drawdowns and as the driving season nears. 

At the same time, the upcoming World Cup may put upward pressure on several prices in participating states. Food, airline ticket prices, and other items are expected to keep going up over time.

Wall Street analysts expect the upcoming report to show that the headline Consumer Price Index rose to 3.6% in April from 3.3% in March.

That is a sign that these numbers are moving further away from the Federal Reserve’s 2.0% target. 

The report comes a few days after the US released a stronger-than-expected jobs report.

According to the Bureau of Labor Statistics, the economy added over 115k jobs in April as the unemployment rate remained unchanged at 4.3%.

US-Iran war updates

The SPY, VOO, and SPYM ETFs will also react to any details about the US-Iran war this week. The US gave Iran a one-page proposal to reopen the Strait of Hormuz last week.

This proposal says that the US would end its blockade of the Strait in exchange for Iran ending its shutdown.

On Friday, Trump said that he expected Iran’s response “tonight.” Still, Iran has not sent its response, a sign that officials and the IRGC want more. 

Analysts believe that Iran is not in a hurry to end the war. For one, US intelligence reports have said that Iran maintains its offensive capabilities, while the US inventories have dropped substantially.

There are also reports that Trump has gotten bored with the war and Iran’s reluctance to end it. 

Any new news on the war will have an impact on the stock market. However, these days, the magnitude of the impact has been relatively muted, a sign that investors have already moved on.

This is how the stock market reacts when there is a black swan event.

For example, the US stock market initially plunged after the start of the COVID-19 pandemic and the Russia-Ukraine war, and then rebounded sharply as investors embraced the new normal.

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