We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 AI Chip and Memory Behemoths to Buy Ahead of August for Big Upside
Read MoreHide Full Article
Key Takeaways
Micron Technology benefits from AI memory demand, expansion plans and rising earnings estimates.
Intel is expanding its AI platform with CPUs, networking and advanced manufacturing to drive growth.
Taiwan Semiconductor sees strong leading-edge chip demand and is boosting Arizona capacity investment.
The astonishing rally of the artificial intelligence (AI) trade has been suffering from persistent volatility over the past month. Massive AI-related capital expenditure by major hyperscalers raised concerns about its monetization in the future.
Moreover, extremely overstretched valuation of these stocks, unabated inflationary pressure due to fluctuations in crude oil prices resulting from geopolitical conflicts in the Middle East and growing expectations of a 25-basis point hike in the benchmark interest rate by the Fed in September are the primary reasons for recent AI trade volatility.
However, we have selected three AI chip and memory giants that have flourished year to date. These stocks are set for a big upside in August supported by their current top Zacks rank. The stocks are: Micron Technology Inc. (MU - Free Report) , Intel Corp. (INTC - Free Report) and Taiwan Semiconductor Manufacturing Co. Ltd. (TSM - Free Report) . Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Micron Technology Inc.
Micron witnessed a meteoric rise in its stock price in the first half of 2026, rallying nearly 340%. However, the recent softness in the stock price has opened a tremendous opportunity for both short and long-term investors.
MU has been benefiting tremendously from the enormous application of AI in day-to-day life, which has pushed up the demand for memory chips. Flash memory technologies like DRAM and NAND are used in AI chips, enabling them to perform optimally.
This has pushed up the demand for AI-enabled memory chips. A huge shortage of memory and storage chips, has resulted in soaring prices of these products. Consequently, MU benefits significantly. The industry’s supply shortage is likely to persist till 2028.
New Tech Trends to Drive Prospects
The performance of any AI model depends on memory performance and capacity. MU’s HBM is a highly sought-after product for major hyperscalers for their AI-enabled chipsets. On July 8, Reuters reported that Micron has decided to invest more than $250 billion in the United States through 2035.
Moreover, MU also unveiled its plan to invest $3 billion in GlobalWafers' silicon wafer manufacturing operations in Texas. The two companies plan to enter a 10-year deal to ensure a long-term supply of raw silicon wafer capacity to the AI memory chip behemoth.
Solid Estimate Revisions
Micron has an expected revenue and earnings growth rate of more than 100% each, for the current year (ending August 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 13.1% over the last 30 days.
MU has an expected revenue and earnings growth rate of 91.4% and more than 100%, respectively, for the next year (ending August 2027). The Zacks Consensus Estimate for next year’s earnings has improved 23.4% over the last 30 days.
Massive Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 66.4% from the last closing price of $900.20. The brokerage target price is currently in the range of $470-$2,000. This indicates a maximum upside of 122% and a maximum downside of 47.7%. The risk/reward ratio is a highly favorable 1:2.56.
Intel Corp.
Intel remains focused on strengthening its capabilities in AI infrastructure, enterprise computing and advanced manufacturing through product innovation and continued ecosystem development.
INTC is making measurable progress in data center processors and purpose-built silicon, which is important as AI infrastructure demand broadens beyond GPUs into CPUs, connectivity and custom compute.
Xeon 6 Clearwater Forest, built on Intel 18A, was described as the fastest-ramping server product in its history. INTC also cited strong hyperscale and enterprise demand, new long-term agreements and improved server CPU industry expectations for 2026 and 2027.
Carving a Niche in AI Ecosystem
Intel's AI PC and edge strategy is gaining traction as AI workloads move closer to the device and enterprise customers seek more efficient local processing. INTC is building a broader AI infrastructure platform that includes CPUs, ASICs, graphics, networking and advanced packaging. This is important because customers are increasingly designing workload-specific systems rather than relying on a single compute architecture.
Solid Estimate Revisions
Intel has an expected revenue and earnings growth rate of 14.9% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last seven days.
INTC has an expected revenue and earnings growth rate of 13.2% and 40.8%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 3.4% over the last 30 days.
Strong Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 17.3% from the last closing price of $91.67. The brokerage target price is currently in the range of $45-$200. This indicates a maximum upside of 118.2% and a maximum downside of 50.9%. The risk/reward ratio is a highly favorable 1:2.32.
Taiwan Semiconductor Manufacturing Co. Ltd.
Taiwan Semiconductor — the largest dedicated integrated circuit foundry of AI-based chips for the world’s best AI chipset developers — has been experiencing solid demand for its advanced technologies, such as 3-nanometer (nm) and 5nm.
The growing adoption of its multi-project wafer processing service, which allows customers to reduce mask costs, is driving its customer momentum. Demand for advanced manufacturing capacity continues to outpace supply, allowing TSM to benefit from favorable pricing, exceptional capacity utilization, and expanding profit margins.
Robust Business Execution
TSM’s high-performance computing revenues accounted for 66% of total revenues and increased 20% sequentially in the last reported quarter. This reflects sustained demand tied to AI and data-center computing. TSM expects continued strong demand for leading-edge technologies, including a steep increase in 2-nm production during the third quarter of 2026.
Moreover, TSM announced an additional $100 billion investment plan for its Arizona fabrication plants, for a total of $265 billion. This indicates TSM’s confidence that the AI boom will continue, and for that, management is not hesitating to expand its capacity. This additional investment will be utilized for 2-nanometer and below production along with advanced packaging.
Solid Estimate Revisions
Taiwan Semiconductor has an expected revenue and earnings growth rate of 35.1% and 53.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last seven days.
TSM has an expected revenue and earnings growth rate of 29.2% and 27%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 1% over the last seven days.
Excellent Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 25.1% from the last closing price of $399.09. The brokerage target price is currently in the range of $330-$650. This indicates a maximum upside of 62.9% and a maximum downside of 17.3%. The risk/reward ratio is a highly favorable 1:3.64.
View the Zacks #1 Rank List
Image: Bigstock
3 AI Chip and Memory Behemoths to Buy Ahead of August for Big Upside
Key Takeaways
The astonishing rally of the artificial intelligence (AI) trade has been suffering from persistent volatility over the past month. Massive AI-related capital expenditure by major hyperscalers raised concerns about its monetization in the future.
Moreover, extremely overstretched valuation of these stocks, unabated inflationary pressure due to fluctuations in crude oil prices resulting from geopolitical conflicts in the Middle East and growing expectations of a 25-basis point hike in the benchmark interest rate by the Fed in September are the primary reasons for recent AI trade volatility.
However, we have selected three AI chip and memory giants that have flourished year to date. These stocks are set for a big upside in August supported by their current top Zacks rank. The stocks are: Micron Technology Inc. (MU - Free Report) , Intel Corp. (INTC - Free Report) and Taiwan Semiconductor Manufacturing Co. Ltd. (TSM - Free Report) . Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Micron Technology Inc.
Micron witnessed a meteoric rise in its stock price in the first half of 2026, rallying nearly 340%. However, the recent softness in the stock price has opened a tremendous opportunity for both short and long-term investors.
MU has been benefiting tremendously from the enormous application of AI in day-to-day life, which has pushed up the demand for memory chips. Flash memory technologies like DRAM and NAND are used in AI chips, enabling them to perform optimally.
This has pushed up the demand for AI-enabled memory chips. A huge shortage of memory and storage chips, has resulted in soaring prices of these products. Consequently, MU benefits significantly. The industry’s supply shortage is likely to persist till 2028.
New Tech Trends to Drive Prospects
The performance of any AI model depends on memory performance and capacity. MU’s HBM is a highly sought-after product for major hyperscalers for their AI-enabled chipsets. On July 8, Reuters reported that Micron has decided to invest more than $250 billion in the United States through 2035.
Moreover, MU also unveiled its plan to invest $3 billion in GlobalWafers' silicon wafer manufacturing operations in Texas. The two companies plan to enter a 10-year deal to ensure a long-term supply of raw silicon wafer capacity to the AI memory chip behemoth.
Solid Estimate Revisions
Micron has an expected revenue and earnings growth rate of more than 100% each, for the current year (ending August 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 13.1% over the last 30 days.
MU has an expected revenue and earnings growth rate of 91.4% and more than 100%, respectively, for the next year (ending August 2027). The Zacks Consensus Estimate for next year’s earnings has improved 23.4% over the last 30 days.
Massive Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 66.4% from the last closing price of $900.20. The brokerage target price is currently in the range of $470-$2,000. This indicates a maximum upside of 122% and a maximum downside of 47.7%. The risk/reward ratio is a highly favorable 1:2.56.
Intel Corp.
Intel remains focused on strengthening its capabilities in AI infrastructure, enterprise computing and advanced manufacturing through product innovation and continued ecosystem development.
INTC is making measurable progress in data center processors and purpose-built silicon, which is important as AI infrastructure demand broadens beyond GPUs into CPUs, connectivity and custom compute.
Xeon 6 Clearwater Forest, built on Intel 18A, was described as the fastest-ramping server product in its history. INTC also cited strong hyperscale and enterprise demand, new long-term agreements and improved server CPU industry expectations for 2026 and 2027.
Carving a Niche in AI Ecosystem
Intel's AI PC and edge strategy is gaining traction as AI workloads move closer to the device and enterprise customers seek more efficient local processing. INTC is building a broader AI infrastructure platform that includes CPUs, ASICs, graphics, networking and advanced packaging. This is important because customers are increasingly designing workload-specific systems rather than relying on a single compute architecture.
Solid Estimate Revisions
Intel has an expected revenue and earnings growth rate of 14.9% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last seven days.
INTC has an expected revenue and earnings growth rate of 13.2% and 40.8%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 3.4% over the last 30 days.
Strong Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 17.3% from the last closing price of $91.67. The brokerage target price is currently in the range of $45-$200. This indicates a maximum upside of 118.2% and a maximum downside of 50.9%. The risk/reward ratio is a highly favorable 1:2.32.
Taiwan Semiconductor Manufacturing Co. Ltd.
Taiwan Semiconductor — the largest dedicated integrated circuit foundry of AI-based chips for the world’s best AI chipset developers — has been experiencing solid demand for its advanced technologies, such as 3-nanometer (nm) and 5nm.
The growing adoption of its multi-project wafer processing service, which allows customers to reduce mask costs, is driving its customer momentum. Demand for advanced manufacturing capacity continues to outpace supply, allowing TSM to benefit from favorable pricing, exceptional capacity utilization, and expanding profit margins.
Robust Business Execution
TSM’s high-performance computing revenues accounted for 66% of total revenues and increased 20% sequentially in the last reported quarter. This reflects sustained demand tied to AI and data-center computing. TSM expects continued strong demand for leading-edge technologies, including a steep increase in 2-nm production during the third quarter of 2026.
Moreover, TSM announced an additional $100 billion investment plan for its Arizona fabrication plants, for a total of $265 billion. This indicates TSM’s confidence that the AI boom will continue, and for that, management is not hesitating to expand its capacity. This additional investment will be utilized for 2-nanometer and below production along with advanced packaging.
Solid Estimate Revisions
Taiwan Semiconductor has an expected revenue and earnings growth rate of 35.1% and 53.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last seven days.
TSM has an expected revenue and earnings growth rate of 29.2% and 27%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 1% over the last seven days.
Excellent Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 25.1% from the last closing price of $399.09. The brokerage target price is currently in the range of $330-$650. This indicates a maximum upside of 62.9% and a maximum downside of 17.3%. The risk/reward ratio is a highly favorable 1:3.64.