The AI business has reached a new stage: The focus 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 Offer. “The progress we’ve made in AI models has made it so memory is the next frontier. We need a lot more memory in chips, in installations, in servers, in the data center.”
“Companies like Micron, SK Hynix and the memory part of Samsung are now becoming more and more important,” he added.
These comments come as Micron ( MU ) continues its vertical climb, with the stock up about 240% over the past year. Despite the rally, the valuation remains strangely wacky to some observers, trading at just 9.9 times forward earnings — a steep discount compared to the S&P 500’s (^GSPC) 22 times and Nvidia’s (NVDA) 25 times.
As the memory supercycle takes hold, analysts have identified three key names to bear for the next part of the revolution.
Idaho-based Micron has transformed from a cyclical laggard to a mainstay of the AI server stack. The primary driver is high bandwidth memory (HBM), a specialized variant of DRAM essential for AI training. Micron recently projected that the total addressable market for HBM will reach $100 billion by 2028, a compound annual growth rate of 40%.
“This is like getting a signed Mickey Mantle card at a garage sale,” Wedbush analyst Dan Ives said of Micron’s current price. Because HBM production is so complex, it’s eating up capacity that would otherwise be used for traditional products like smartphones and flash storage, allowing Micron to secure thicker 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 look to South Korea’s SK Hynix ( 000660.KS ) as the true epicenter of the memory boom. SK Hynix is the primary supplier of HBM to Nvidia, holding a market share of around 60% as of the end of 2025.
However, the bull case for SK Hynix is also its biggest risk, as its lead is so pronounced that it faces severe capacity constraints. If SK Hynix cannot meet the increasing demand for HBM4 — the next generation of AI memory — it risks losing ground to its rivals in 2026. Anyway, UBS recently predicted that SK Hynix’s HBM4 market share could reach 70% in 2026, as the company plays a key role in Nvidia’s upcoming Rubin platform.
A standout surprise was Sandisk (SNDK). In the last year, the shares have catapulted more than 800% after the spin-off from Western Digital (WDC). While most discussions of AI focus on DRAM, or short-term memory, Sandisk is a major player in NAND flash, or long-term storage, which is becoming increasingly critical to what Luria describes as “AI at the edge.” Such innovations include devices such as robots and autonomous cars, which rely on technology to process and store data locally.
