Introduction#
The rise of artificial intelligence (AI) is significantly changing the semiconductor industry, particularly in the relationship between processors and memory chips that handle large data tasks. Analyst Jordan Klein from Mizuho has identified several memory stocks that could benefit from this trend, noting their current attractive pricing.
AI's Impact on Memory Demand#
Klein expresses strong optimism about the memory sector, particularly DRAM (Dynamic Random Access Memory), which is essential for CPU (Central Processing Unit) performance. He emphasizes that as AI technology accelerates, the demand for memory will increase, especially since supply is tightening and new supply isn't expected until late 2027. This situation is likely to drive prices up.
Key Memory Stocks to Watch#
Among the memory stocks, Klein points out Micron Technology, Samsung, Hynix, and SanDisk as being undervalued compared to companies like Advanced Micro Devices, Arm Holdings, and Intel. He describes Micron as “crazy cheap” and believes SanDisk is well-positioned ahead of its earnings report, with rising demand for SSDs (Solid State Drives) potentially leading to strong earnings per share.
CPU and GPU Relationship#
A significant insight from Intel's recent conference call highlights the increasing need for CPUs in AI applications that require autonomous task management. The expected ratio of CPU to GPU (Graphics Processing Unit) usage in these applications is shifting, indicating a greater reliance on CPUs than in previous AI models. Klein suggests that AMD is well-positioned in this landscape due to its partnerships and less capacity constraints compared to Intel.
Overall, the evolving AI landscape is creating new opportunities in the memory sector, making it an area of interest for investors looking to capitalize on technological advancements.