The memory chip boom showed no sign of losing momentum. Price increases are on the way, thanks to AI server demand. That gives investors three chip stocks to consider.
Micron won a bullish analysis from BofA. Analysts are expecting global cloud and AI infrastructure spending to top $1.5 trillion by 2027. After a brief dip, shares of NVIDIA (NVDA) roared back. Texas Instruments (TXN), Cadence Systems (CDNS), and ADI (ADI) are low-volatility stocks to watch.
BofA set a $1,550 price target on Micron stock. The company offers investors direct exposure to the rising DRAM demand.
Samsung (SSNLF) benefits from the strong AI demand. It supplies chips to firms like Alphabet (GOOG), Apple (AAPL), and Nvidia. If it raises prices by 20%, profit margins will go up by at least that much. Competitors like Micron and SK Hynix will copy the price hike, benefiting the industry.
SK Hynix recently joined the U.S. exchanges. It raised $26.5 billion by selling 177.9 million American Depository Receipt shares, priced at $149. The stock closed last week at $168.01.
The firm is forecasting a memory shortage that lasts beyond 2030. Customers are signing long-term contracts on that belief. Even if markets faced a glut in memory chips, SK Hynix would still report revenue from contracts.
It produces HBM chips, which Nvidia relies on. Since AI relies exclusively on Nvidia chips, SK Hynix is a clear outperforming company amid this long-term AI boom.
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