AI Stocks: Let’s Be Honest, It’s About the Hardware

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Right. So, the Nasdaq-100, bless its heart, decided to have a bit of a moment in 2025 – a solid 20% jump. All thanks to the AI hype train. Honestly, it’s a bit exhausting. Everyone’s chasing the shiny object, the next chatbot that’ll write our grocery lists and probably judge our life choices. But let’s be real, most of these AI darlings? They’re burning cash faster than I go through a bottle of wine on a Monday. Billions. Just…billions. And for what? Expensive toys that need even more expensive hardware to run. It’s a beautifully unsustainable cycle, isn’t it?

Look, I’m not saying AI isn’t the future. I’m saying if you want to actually make money from it, forget the software for a minute. The real opportunity? It’s always been in the pick-and-shovel game. The stuff that actually makes the magic happen. Which brings us to two companies I’ve been eyeing: Micron Technology and Broadcom. Don’t expect fireworks, but a quiet, steady burn is sometimes the best kind.

Micron Technology

Micron. Now there’s a name that hasn’t exactly set the world alight, has it? For decades, it’s been… just there. But, and this is the juicy bit, shares are up nearly 400% in the last 12 months. Finally, finally, it’s having a moment. And honestly? It still feels undervalued. Everyone’s suddenly realized that generative AI needs… memory. Lots and lots of high-bandwidth memory. It’s like realizing you need oxygen to breathe. Obvious, really, but it took a while for the market to catch on.

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For those who haven’t ventured into the depths of semiconductor geekery, Micron makes the memory chips that live inside everything – your phone, your car, your slightly terrifying smart fridge. Traditionally, it’s been a commodity business. Everyone makes pretty much the same thing, so you compete on price. Thrilling, I know. But AI changes things. Analysts at Mizuho are predicting NAND memory prices could skyrocket next year – a 330% jump. Suddenly, being a memory chip maker isn’t so dull, is it?

The best part? The market hasn’t fully priced this in yet. A forward P/E of just 13? That’s practically a steal. The S&P 500 is averaging 22. It’s like finding a designer handbag in a charity shop. I’m not saying it’s a sure thing – nothing ever is – but it’s definitely worth a closer look. And maybe a small, reckless investment. Don’t tell my financial advisor.

Broadcom

Okay, so you’ve got the memory. Now you need something to actually do the thinking. That’s where graphics processing units (GPUs) and AI accelerators come in. These are the brains of the operation. Right now, Nvidia is the king of the hill, and good for them, I guess. But Broadcom is quietly creeping up, offering custom chips that are starting to turn heads. Because let’s be honest, one-size-fits-all solutions are rarely the most efficient, are they?

The difference between Broadcom and Nvidia is interesting. Nvidia designs the chips and outsources the manufacturing. Broadcom actually makes the custom chips designed by other companies. These are called application-specific integrated circuits – fancy, I know – and they can deliver serious cost and efficiency savings. It’s like having a tailor-made suit versus buying something off the rack. One is…sensible, the other is…well, you get the picture.

And the big news? OpenAI – yes, the ChatGPT people – are partnering with Broadcom to build custom AI chips. That’s a pretty strong signal, wouldn’t you say? It’s like getting a glowing recommendation from the cool kids. It’s happening now, scheduled for launch this year.

Long term, custom chips just make more sense. They give AI companies more control over their supply chains and offer the potential for cost savings. And in a world where the software side of AI is largely losing money, efficiency is king. It’s basic economics, really. And I do love a good efficiency play.

Broadcom trades at a premium, a forward P/E of 33. But honestly, it’s justified. Fourth-quarter revenue jumped 28% year over year to $18 billion, driven by a whopping 74% jump in AI semiconductor revenue. That’s not a bad day at the office, is it?

Which stock is better for you?

Look, both Micron and Broadcom are solid plays for getting exposure to the AI opportunity. But if I had to pick one? Micron. It’s still largely undiscovered by the market, its rock-bottom valuation is screaming “buy me,” and with global memory shortages expected to continue, it’s poised for explosive growth. It’s a bit like finding a hidden gem. And honestly, I do love a good treasure hunt. Just don’t tell anyone I said that.

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2026-02-02 10:02