3 Memory Stock Winners to Watch

Energy, parts, and infrastructure for AI, as it turns out, are expensive. This is great for companies supplying such things, but it can mean that other companies (those that use a lot of energy or buy computer components) are affected and have to eat or pass on the costs.

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We’re going to talk about highly rated stocks as determined by our Zen Ratings system, but also about stocks that need careful monitoring with these fluctuating costs in mind. Pay close attention and understand that these A-rated stocks might only be best for certain portfolios. There is risk involved.

Here are three to watch:

1. Micron Technology (NASDAQ: MU)

Note: MU has been having a volatile few weeks. Be sure to check wallstreetzen.com for the latest price and data on the stock.

One of the most-watched stocks in recent memory (and for good reason), MU is one of the clearest beneficiaries of the rise in demand for memory chips. It’s one of the biggest suppliers in the U.S., after all. And numbers have been and remain strong for the stock (see below):

The growth signals remain strong, and it has a Component Grade of A for Growth, Momentum, and Sentiment. However, it’s important to remember that this will not last forever. Memory demand cycles, and a bust must eventually occur. 

Investors will want to closely watch the stock's safety signals, how strong demand for MU’s products remains (not in general, but relative to expectations), and how growth holds up. We noted it as a growth stock before and continue to do so, but growth cannot necessarily last forever.

2. Dell Technologies Inc (NYSE: DELL)

Let’s look at another side of this, and a company that is really feeling the costs of memory: DELL. They buy a lot of it. However, DELL also makes AI infrastructure (highly in demand). Right now, the balance is in their favor, with a 73% year-over-year increase in revenue. Their share price has certainly benefitted.

Because of these two conflicting considerations, DELL is one to watch very carefully. It is still a strong recommendation according to our Zen Ratings system, but a few news stories could change that fact. Review how memory prices change over time, the demand for servers AI use, and how profitable DELL remains.

3. Hewlett Packard Enterprise Co (NYSE: HPE)

Very similar to DELL is HPE, which is also benefiting from AI and IT infrastructure needs while facing higher memory prices. It has strong ratings from analysts, and many of the same factors affecting DELL are also influence the growth of HPE.

Reviewing the Component Grades, HPE is another growth option, though it has a slightly better Safety score than some other stocks affected by memory prices. Investors will want to watch the same trends in the AI sector as with the key names, and will similarly want to see whether sentiment surrounding HPE remains strong.

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