NVIDIA Started The AI Rally — Now Memory And Power Chip Stocks Are Stealing The Spotlight

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Semiconductor analysts say the artificial intelligence spending boom continues to reshape the chip industry, driving long-term demand across memory, networking, power semiconductors, and AI infrastructure companies.

The PHLX Semiconductor Index has gained 60% year-to-date and over 131% in the last 12 months.

Seaport Research Says AI Demand Is Rippling Across Chips

Seaport Research Partners analyst Jay Goldberg told CNBC on Saturday that AI demand is a major force spreading through the semiconductor industry, initially benefiting NVIDIA Corp. (NVDA) and Broadcom Inc. (AVGO) before expanding into networking, memory, and semiconductor equipment stocks.

Goldberg said AI-driven demand is fundamentally changing parts of the industry, particularly the memory markets, where companies are now securing long-term supply contracts that were historically difficult to obtain.

While remaining positive on the long-term AI cycle, Goldberg warned that semiconductor stocks may face periodic pullbacks because markets currently expect near-perfect execution from companies riding the AI wave.

He also identified power semiconductor companies such as ON Semiconductor Corp. (ON), Texas Instruments Inc. (TXN), Analog Devices, Inc. (ADI), and Infineon Technologies AG (IFNNY) as the next likely beneficiaries of expanding AI infrastructure demand, especially as data centers migrate toward higher-voltage power architectures.

Goldberg added that supply disruptions, including a potential labor strike at Samsung Electronics Co. Ltd. (SSNLF), could further tighten the memory market. However, existing long-term contracts may soften the impact of short-term shortages.

Melius Research Says AI Boom Still Has Room To Run

Melius Research head of technology research Ben Reitzes told CNBC on Monday that the semiconductor rally still has further upside because hyperscalers continue funneling operating cash flow into AI infrastructure investments.

Reitzes said innovations tied to OpenAI, Alphabet Inc. (GOOGL) Google, and other AI leaders are accelerating revenue growth and driving additional capital spending across the semiconductor ecosystem.

He argued that AI infrastructure demand remains strong because highly profitable technology companies are funding most investments internally rather than relying heavily on external financing.

Reitzes also highlighted geopolitical risks tied to Taiwan and semiconductor supply chains, saying the U.S. still needs to accelerate domestic chip manufacturing investments.

He described the environment as bullish for Intel Corp. (INTC) and other foundries outside Taiwan Semiconductor Manufacturing Co. Ltd. (TSM).

Among chip stocks, Reitzes identified memory companies Micron Technology Inc. (MU) and SanDisk Corp. (SNDK) as attractive long-term opportunities because memory has become a critical bottleneck in AI infrastructure.

He said long-term supply agreements could make memory earnings more predictable and potentially support higher valuation multiples over time.

Price Action: NVIDIA shares were up 1.71% at $224.38, Broadcom shares were up 1.09% at $415.56, SanDisk shares were up 2.15% at $1413.00, Intel shares were up 4.15% at $115.40 and Micron Technology shares were up 4.04% at $727.00 during premarket trading on Wednesday, according to market data.