SK Hynix's US Debut, Bring Back the Blockade, and a Water Break Boost 7/10/26

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**Kelly Evans** (1:03)
Thank you very much, Scott. The S&P and the Nasdaq are on pace for positive weeks, despite today's modest moves. I'm Kelly Evans and welcome to The Exchange. Gold, by the way, is on track for a down week. And that says odds of a rate hike this year have jumped to 63% now, amid renewed tensions with Iran. We'll have more on that in a little bit, by the way, with Robin Brooks. We're also tracking shares of SK Hynix soaring 17% on their USIPO today, after increasing that price last night. As for the rest of the memory trade, Micron's fractionally lower, trying to avoid its first three week losing streak in nearly a year. But the rest of the group's seeing some gains and poise for their first positive week in three. We'll talk more about this right now, actually. Let's begin with these questions about the future of the biggest names in the market, with several of the Mag 7s still under pressure, as they struggle to fund and win the AI race. One notable standout, though, is Apple. It's on track for back-to-back weekly gains for the first time in over a month, and the company is close to overtaking NVIDIA now as the world's biggest public firm. Let's talk about it with Sylvan Capital's Michael Sansaterra in today's opening exchange. Michael, it's great to have you. Welcome.

**Michael Sansaterra** (2:12)
Nice to see you, Kelly.

**Kelly Evans** (2:13)
We just highlighted this back and forth.
The memory and chip trade is up ninefold, but then it's had three down weeks, and now the Mag-7 or some of them are breaking out, the whole grouping really doesn't make sense anymore. Talk through as you have a lot of exposure to these areas, what are you doing about it?

**Michael Sansaterra** (2:31)
Yeah. Never a dull moment. There's a lot of volatility, they're up one, they're down one day to day. If I was a trader, I'd go crazy. But we're still long-term investors, so we're looking for the places we think can exceed investors' expectations. Apple's a place where we're actually slightly underweight, despite its most recent move, breaking out to new highs and, as you said, threatening Nvidia with market cap dominance. But the issue really is the price increases due to memory. We're concerned that we're going to get to the cycle here in September, having seen most of their hardware raised price 15 to 30 percent thereabouts.
What are they going to do with the iPhones? It could be $100 to $200 on the high end, maybe less on the lower end. But weirdly, where's the AI? I think that's going to be the where's the beef moment for Apple. Where is the AI for these price increases?
What is the consumer really getting? Is it evolutionary or revolutionary? Is it just another product cycle? We are on the margin a little underweight Apple rather than overweight it, because we're not really believers yet that they've figured out how to really display and monetize AI for customers in their phones.

**Kelly Evans** (3:35)
I want to debate you on that, although I don't know if I need to, but I could see people going, from my point of view, consumers are so accustomed now to having to pay up. Every time we turn around, where was I the other day I walked in and the price of everything had been raised?
At Peter's Fish Market, which is my favorite place to go, and the price of everything is up another $2 a pound. Are consumers really going to bulk at paying more for probably their most used thing for the iPhone? I don't know, maybe a little bit on the margin, but I don't know if it's going to be that much of a headwind.