3 semiconductor stocks to play the AI supercycle, according to analysts
AI business has entered a new phase: Attention is shifting from the chips that process data to the hardware needed to store it.
“We’re very early in the memory cycle right now,” DA Davidson analyst Gil Luria told Yahoo Finance’s Opening Quote. “The progress we’ve made in AI models has enabled memory to become the next frontier. We need much more memory in chips, in installations, in servers, in the data center.”
“Companies like Micron, SK Hynix and the part of Samsung that deals with memory are now becoming increasingly important,” he added.
These comments come as Micron (MU) stock continues its vertical ascent, up nearly 240% in the past year. Despite the rise, valuation remains oddly odd to some observers; It trades at just 9.9 times forward earnings; That’s a steep discount compared to the S&P 500’s (^GSPC) 22x and Nvidia’s (NVDA) 25x.
As the memory supercycle takes hold, analysts have identified three key names to own in the next leg of the revolution.
Idaho-based Micron has grown from a cyclical laggard to a cornerstone of the AI server stack. The primary driver is high-bandwidth memory (HBM), a special type of DRAM required for AI training. Micron recently predicted that the total addressable market for HBM will reach $100 billion by 2028; this is a staggering compound annual growth rate of 40%.
“It’s like buying a Mickey Mantle autographed card at a garage sale,” Wedbush analyst Dan Ives said of Micron’s current price. Because HBM manufacturing is so complex, it eats up capacity that would normally be used for traditional products like smartphones and flash storage, allowing Micron to achieve higher margins and unprecedented pricing power.
Read more: How can you protect your portfolio if you’re worried about an AI bubble?
While Micron is the local favorite, many on the Street see South Korea’s SK Hynix (000660.KS) as the true epicenter of the memory boom. SK Hynix is Nvidia’s main HBM supplier and maintains a market share of approximately 60% by the end of 2025.
However, the bull case for SK Hynix also poses the biggest risk because its lead is so pronounced that it faces severe capacity constraints. If SK Hynix cannot meet growing demand for HBM4, its next-generation AI memory, it risks losing ground to rivals in 2026. Still, UBS recently estimates SK Hynix’s HBM4 market share can reach 70% In 2026, the company will play a key role in Nvidia’s next-generation Rubin platform.
The one that stood out surprisingly was Sandisk (SNDK). Last year, shares rose over 800% following the split of Western Digital (WDC). While most AI discussions focus on DRAM, or short-term memory, Sandisk is a leading player in NAND flash, or long-term storage, which is increasingly critical to what Luria describes as “AI at the edge.” Such innovations include devices such as robots and autonomous cars that rely on technology to process and store data locally.
