Beyond the Chip: Why Memory is the New Frontier of the AI Gold Rush

The investment landscape for artificial intelligence has entered a transformative phase, moving its primary focus from processing power to data storage solutions. According to DA Davidson analyst Gil Luria, the industry is currently in the nascent stages of a "memory cycle," where the massive scale of AI models necessitates a significant expansion of memory capacity across servers and data centers. This shift has elevated the importance of major manufacturers such as Micron, SK Hynix, and Samsung.

Micron Technology has emerged as a critical player, evolving from a traditional cyclical firm into a vital component of the AI infrastructure. The company’s growth is fueled by High-Bandwidth Memory (HBM), which is indispensable for training AI systems. Analysts highlight that the complexity of HBM production has tightened the supply of standard memory for consumer electronics, granting Micron significant pricing power and improved profit margins. Despite a massive stock surge over the last year, Micron’s valuation remains lower than many of its tech peers, leading some experts to view it as an undervalued asset in the current market.

In South Korea, SK Hynix is regarded by many as the central figure of this boom due to its dominant relationship with Nvidia. Holding roughly 60% of the market share as of late 2025, the company is a primary supplier for high-end AI chips. While SK Hynix faces potential risks regarding production capacity for future generations like HBM4, projections suggest it could capture up to 70% of that market as it integrates into Nvidia’s upcoming Rubin platform.

Beyond short-term memory, Sandisk has seen an extraordinary rise following its spin-off from Western Digital. While most AI discourse focuses on DRAM, Sandisk specializes in NAND flash—long-term storage that is becoming essential for "AI at the edge." This includes local data processing for autonomous vehicles and robotics, expanding the AI hardware narrative beyond the data center.

However, some analysts urge caution, noting that memory remains a commodity-driven business. Unlike Nvidia, which benefits from a proprietary software ecosystem, memory chips are largely interchangeable. This means that once current supply shortages are resolved, manufacturers may lose their leverage as customers shift orders between suppliers. While the current supply bottleneck makes these stocks attractive for short-to-medium-term trading, the long-term sustainability of these high margins remains a point of debate among market experts.