Why Micron and SK Hynix Could Quietly Become the Real AI Winners

Investors who are looking for high-potential artificial intelligence (AI) stocks often pick well-known semiconductor players such as Nvidia and Advanced Micro Devices, hyperscalers such as Amazon and Microsoft, or software players like Palantir and SoundHound AI.

But many investors are missing one real AI opportunity that's staring us in the face.

Image source: Getty Images.

AI models continue to get larger and more complex. Additionally, as the systems mature, hyperscalers and enterprises are transitioning from infrequent AI training workloads to more frequent AI inferencing workloads. And now, memory bandwidth and capacity are proving to be bigger bottlenecks than AI computing capacity in large AI clusters.

Within that dynamic, leading memory players such as Micron Technology (NASDAQ: MU) and SK Hynix (OTC: HXSCL) -- already crucial players in the global buildout of AI infrastructure -- are well-positioned to prosper.

Favorable memory market trends

The server clusters built around cutting-edge AI processing chips increasingly require higher-performance, energy-efficient, high-bandwidth memory (HBM) and advanced DRAM in order to operate efficiently. In fact, every new generation of AI GPUs uses increasingly more HBM and advanced DRAM.

So naturally, data center companies are increasing their spending on memory as part of their ongoing AI infrastructure buildouts. The global HBM market is forecast to grow from $17 billion in 2024 to $98 billion in 2030, while HBM's revenue share in the DRAM market is estimated to grow from 18% to 50% in that same time frame. This trend favors Micron and SK Hynix, which stand to benefit from the higher memory content of systems designed to handle large, scalable AI workloads.

Micron and South Korea-based SK Hynix can expect to enjoy solid pricing power and higher margins, as there is currently a chronic shortage of advanced DRAM. According to DigiTimes, many major hyperscalers are securing only 70% of their server DRAM orders, despite accepting 50% price hikes in the fourth quarter.

Micron is capitalizing on this opportunity

U.S.-based Micron has gradually transformed itself from a cyclical DRAM and NAND producer into a full-stack, AI-optimized memory and storage player. The company's performance in its fiscal 2025 (which ended Aug. 28) was impressive, with revenues soaring 49% to $37.4 billion, and non-GAAP diluted earnings per share surging nearly 538% to $8.29. Increasing memory demand from data center operators has been the key growth catalyst. In fiscal 2025, its data center business accounted for 56% of Micron's total revenues.

Micron's DRAM market share was close to 22.5% in September. Management also forecast that its HBM market share would be similar to its DRAM share in the third quarter of calendar 2025, as it ramps its third-generation extended (HBM3E) and fourth-generation (HBM4) HBM products. That was an achievable goal, considering that Micron was already the second-largest player in the HBM market in the second quarter of calendar 2025, with a 21% share, according to market research firm Counterpoint Research.

Micron's HBM strategy seems to have been quite successful, as its HBM revenues reached nearly $2 billion in the fourth quarter of fiscal 2025, which translates to an annual run rate of close to $8 billion. The company has already entered into pricing agreements for a significant chunk of its HBM3E supply in 2026, and expects to sell out its entire 2026 supply in the next few months.

The company is also advancing its technology leadership and has ramped up production of its 1-gamma DRAM node to achieve mature yields 50% faster than the previous-generation process node. The company was the first to ship a 1-gamma DRAM chip and plans to leverage its superior process technology across its entire DRAM portfolio.

SK Hynix remains the leader

While Micron is slowly expanding its market share, SK Hynix is already the leader in the HBM market, with a 62% share as of the second quarter of 2025. SK Hynix has also completed development of its next-generation HBM4 and plans to begin shipping that product in the fourth quarter, followed by a rapid scale-up of production in 2026.

SK Hynix has also finalized its 2026 HBM supply plan for major clients, and management expects HBM supply to remain tight even in 2027. As memory companies increasingly allocate production capacity to HBM, the marketplace is now experiencing shortages of some traditional memory products, too. SK Hynix is also a leader in the DRAM market, with a 35% share in the third quarter. Hence, some of its customers have started issuing pre-purchase orders for DRAM and NAND products for 2026.

The company also delivered exceptional performance in the third quarter, as revenues soared 39% year over year to 24.4 trillion Korean won (about $16.6 billion). Operating profit also rose 62% to an all-time high of 11.4 trillion Korean won (about $7.7 billion).

AI winners

SK Hynix expects the AI memory market to grow by almost 30% annually through 2030. The company is also a key HBM supplier to Nvidia; Micron supplies the GPU leader with smaller HBM volumes.

With a favorable demand environment for their offerings and strong technological advantages, both Micron and SK Hynix are well positioned to keep capturing a significant share of this growing and profitable market.

Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Microsoft, Nvidia, and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.