3 Semiconductor Stocks to Play AI Supercycle, According to Analysts

The AI ​​trade has entered a new phase: the spotlight is shifting from the chips that process the data to the hardware needed to store it.

“Right now, we’re very early in the memory cycle,” DA Davidson analyst Gil Luria told Yahoo Finance’s opening bid. “Memory has become the next frontier with the advances we’ve made in AI models. We need more memory in chips, in installations, in servers, in the data center.”

“Companies like Micron, SK Hynix and Samsung’s memory parts are now becoming increasingly important,” he added.

The comments come as Micron ( MU ) continues its steep climb, with the stock up nearly 240% over the past year. Despite the rally, the valuation remains oddly out of whack for some observers, trading at just 9.9 times forward earnings — a steep discount to the S&P 500’s ( ^GSPC ) 22 times and Nvidia’s ( NVDA ) 25 times.

As the memory supercycle took hold, analysts identified three key names for the next phase of the revolution.

Idaho-based Micron has gone from a cyclical laggard to a cornerstone of its AI server stack. The primary driver is high bandwidth memory (HBM), a special DRAM variant required for AI training. Micron recently projected the total addressable market for HBM to reach $100 billion by 2028, a 40% compound annual growth rate.

“It’s like getting a Mickey Mantle signed card at a garage sale,” Wedbush analyst Dan Ives said of Micron’s current value. Because HBM production is so complex, it eats up capacity that would otherwise be used in traditional products like smartphones and flash storage, allowing Micron to secure fat margins and unprecedented pricing power.

Read more: How to protect your portfolio if you’re worried about an AI bubble

While Micron is a domestic favorite, many on the street view South Korea’s SK Hynix ( 000660.KS ) as the real center of the memory boom. SK Hynix is ​​the primary supplier of HBM to Nvidia, maintaining a market share of around 60% until the end of 2025.

However, the bull case for SK Hynix is ​​also its biggest risk, as its leadership is so clear that it faces serious capacity constraints. If SK Hynix cannot meet the growing demand for HBM4 – the next generation of AI memory – it risks losing ground to its rivals in 2026. Still, UBS recently forecast SK Hynix’s HBM4 market share could reach 70% by 2026, as the company plays a major role in Nvidia’s Next-Rubin platform.

A surprising standout has been Sandisk (SNDK). Over the past year, shares have catapulted more than 800% since the spin-off from 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 of what Luria describes as “AI at the Edge.” Such innovations include devices such as robots and autonomous cars, which rely on technology to locally process and store data.