The semiconductor sector drives the AI revolution. It makes powerful data center chips for AI model development, training, and deployment. Nvidia's (NASDAQ: NVDA) GPUs excel in certain applications. Over the past year, Nvidia stock has tripled, valuing the business over $2.2 trillion. Only Apple and Microsoft are more valuable.
I'm kidding when I say to forget on Nvidia because it will likely keep creating wealth for investors. But the AI market is growing swiftly, and other semiconductor stocks are rising. Micron Technology (NASDAQ: MU) stock achieved a record $113.50, surpassing its two-year high. Here's why buying is still possible.
AI isn't limited to data centers. Micron is a leading DRAM and NAND chip manufacturer, which are increasingly vital to Nvidia's data center GPUs' performance. Nvidia's H200 chip, the successor to its industry-leading H100, uses Micron's HBM3E memory technology.
Micron's HBM3E memory uses 30% less energy than competitor gear, and data center operators are focusing on minimizing electricity usage due to AI workloads' massive computing power. It's no surprise that Micron's high-bandwidth memory (HBM) is sold out for 2024 and most of 2025.
However, Micron's AI opportunity is spreading outside data centers. AI processors will be in all new computers and mobile devices, improving response times and user experience.
AI-specific neural processing units (NPUs) are built into next-generation computer chipsets. They require up to 80% more DRAM than conventional PC processors, which boosts Micron's revenue.
AI-enabled smartphones might have twice the DRAM of standard models, according to Micron. Samsung's Galaxy S24, with many AI features, uses Micron's AI processors. They include Live Translate, which lets two people communicate in different languages over the phone, and Circle to Search, which recognizes things in photographs and instantly searches online.
On-device processing will bring AI into everyday life from the data center, making it the industry's next frontier. A leading AI CPU and NPU manufacturer, Advanced Micro Devices has shipped millions of AI-enabled devices, and demand is rising.
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