Tech analyst Dan Ives has some glowing things to say about the memory sector, and it's not hard to see why. Demand for memory chips is absolutely outstripping supply, and that's creating a sweet spot for companies in the space.

Memory Stock Trade

The Roundhill Memory ETF (DRAM) and memory stocks like Micron Technology Inc (MU) have been drawing serious investor interest in recent months. According to Ives, a Senior Managing Director at Yorkville Ives, that trend is far from over.

"There's no way around it," Ives told CNBC.

The former Wedbush analyst highlighted that in the context of the AI revolution, the demand-to-supply ratio for memory is sitting at around 15 to 1. That's a staggering imbalance, and it's pushing prices up. Companies like Apple are feeling the pinch, having to shell out more for memory as demand surges.

"Memory players, right now it's their world and everyone else is paying rent," Ives said.

He acknowledged that the memory sector will see its ups and downs, but the broader multi-year cycle is set to keep playing out. As for concerns about alternatives or Chinese competitors shaking up the market, Ives isn't worried. South Korea remains the dominant force, and that's not changing anytime soon.

"Korea holds the cards when it comes to memory," he added.

When asked about the risk of companies overordering or inventory piling up, Ives brushed it off. "It's starting to play out from a bull case scenario," he said.

Nvidia Earnings

Ives also weighed in on the upcoming earnings report from NVIDIA Corp (NVDA), which could be a major catalyst for the AI trade. He thinks investors are underestimating just how big Nvidia's ambitions are.

"You're almost giving them minimal credit for physical AI," Ives said.

He described Nvidia's earnings as incredibly important for the tech trade, calling it a potential "planting the flag moment." Known for his baseball analogies, Ives suggested the AI trade might not be in the seventh inning as some think, but rather just at the bottom of the second.

Ives continues to heap praise on Nvidia CEO Jensen Huang, dubbing him the godfather of AI. "Betting against Jensen would be like those that bet against Tom Brady," he said.

Nvidia is set to report its second-quarter financial results on Wednesday, Aug. 26.