Prediction: 2 Under $1 Trillion Stocks That Will Be Worth More Than Micron 5 Years From Now
Micron (NASDAQ: MU) is one of the most popular stocks in the market today, given its surging growth and cheap valuation. The stock currently has a market cap of just over $1 trillion, but I think there are two under-$1 trillion market-cap companies in the semiconductor space that are likely to surpass it in value in the next five years.
The first of these semiconductor stocks is SK Hynix (NASDAQ: SKHY), while the second is Advanced Micro Devices (NASDAQ: AMD).
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SK Hynix: The better memory play
SK Hynix and Micron compete directly in the memory market. They are two of the big three DRAM makers, along with Korean conglomerate Samsung.
Micron has arguably been outperforming SK Hynix, delivering better revenue and profit growth. However, the reason behind this is why I think SK Hynix will outperform Micron over the next five years and become the larger market cap company.
The memory market is largely being driven by demand for a specialized form of DRAM (dynamic random access memory) called high bandwidth memory (HBM), which gets packaged with graphics processing units (GPUs) and other AI chips to reduce latency and optimize performance. Demand is through the roof, with SK Hynix recently saying HBM demand was currently more than double the supply. With the big three DRAM makers dedicating much of their resources toward HBM, conventional DRAM prices have actually been rising at a quicker pace than HBM.
This dynamic has benefited Micron, which derives the least memory revenue from HBM among the group, with an HBM market share under 20%. SK Hynix, on the other hand, is the HBM leader, with about 50% market share, and it has a $500 billion long-term contract agreement with Nvidia.
Over the next five years, SK Hynix should be the company that outperforms, given that it is the technology leader in the space. Both companies currently have similar gross margins, but SK Hynix is generating more revenue and has more net cash on its balance sheet, so there is no reason it should have a lower market cap than Micron right now. As such, I expect SK Hynix’s stock to outperform over the next five years.
AMD: Multiple drivers
While AMD stock is not anywhere near as cheap as SK Hynix and Micron, the company has some of the best opportunities in the AI infrastructure space. The company is riding two of the biggest trends in AI: inference and agentic AI.
