HSBC believes concerns that the memory chip industry is nearing its peak are overdone. The firm expects strong AI demand to support earnings growth for memory makers over the next several years. It also sees rising HBM (High-Bandwidth Memory) prices and continued cloud investment to support growth.

TipRanks Welcomes a New ETF – NYSE:RANK

• TipRanks has entered a new arena in the investing world, powering the index of an ETF based on its unique data now trading under the ticker RANK on the NYSE.
• RANK tracks the performance of the TipRanks US Momentum Analysts Index, a rules-based index of 50 large U.S. companies.

Among memory stocks, HSBC remains most bullish on SK Hynix (SKHY), citing its leadership in HBM and SO-CAMM2 memory. SO-CAMM2 is a next-generation memory technology designed for AI servers. Despite the stock's recent pullback, HSBC reiterated its Buy rating on SK Hynix, with a price target implying 83.5% upside from current levels. The firm expects SK Hynix to retain about 50% to 55% of the HBM market through 2027.

HSBC also reiterated Buy ratings on Samsung Electronics (SSNFL) and Micron (MU), saying all three companies should benefit from rising memory prices and continued AI spending.

Here's Why HSBC Is Bullish on Memory Sector

HSBC acknowledged that investors have become more cautious on chip stocks. Many are worried about slowing memory prices and increasing industry capacity. Others worry that major cloud providers could slow their AI infrastructure spending. HSBC, however, believes these fears are overdone and expects higher HBM prices to support the market.

The firm also expects next-generation memory technologies to see wider adoption. At the same time, growing demand for NAND chips used in AI workloads should provide another growth driver. HSBC compared today's AI boom to the PC supercycle of the 1990s. The firm believes AI will continue driving investment in data centers and computing infrastructure.

The firm forecasts the HBM market will grow at a compound annual growth rate of 70% between 2025 and 2028, reaching $196 billion by 2028. It also expects global server shipments to rise 20% in 2026 and 21% in 2027, driven by continued AI infrastructure investment.

Which Memory Stock Offers the Highest Upside, According to Analysts?

Not many analysts have initiated coverage of SK Hynix's ADRs, but investors can look at other U.S.-listed memory chip stocks using the TipRanks Stock Comparison tool. Among these, Micron stock offers the highest upside of 73.5% with a Strong Buy rating from analysts.