In this article, we will look at the 10 Best High-Bandwidth Memory (HBM4) Value Chain Stocks to Buy According to Hedge Funds.

High-Bandwidth Memory (HBM) has emerged as the primary supply constraint in AI. In the early phase of the AI infrastructure development, GPUs were the primary constraint. While power remains the biggest long-term constraint, memory continues to be a bottleneck in AI development in the short-term.

Goldman Sachs now expects the DRAM supply-demand shortfall in 2026 to reach 4.9%, revising its forecast upward from 3.3%. The firm described it as the most severe shortage in roughly 15 years.

Recently, Nvidia CEO Jensen Huang met with the SK hynix leadership team in Seoul and spoke to CNBC. In his statement to the media company, he warned that global memory shortages could last several years as the industry transitions to the next-generation HBM4 architecture.

The two tech giants, Nvidia and SK hynix, are officially partnering for the long term to co-develop the next-generation AI memory chips.

Chey Tae-won, Chairman of SK Group, remarked:

SK hynix and NVIDIA have been building toward this for years, and this partnership reflects the depth of that collaboration. Together, we are codeveloping the next generation of memory for AI factories and applying AI to how we design and manufacture semiconductors, work that will shape the future of AI infrastructure.

Memory stocks aren’t the only ones skyrocketing as a result of these developments. All the companies involved in the HBM value chain are benefiting, prompting us to write about the 10 best high-bandwidth memory value chain stocks to buy according to hedge funds.

Our Methodology

To compile the list of 10 Best High-Bandwidth Memory (HBM4) Value Chain Stocks to Buy According to Hedge Funds, we considered only companies with a market cap of at least $2 billion. We then looked at companies that either directly designed or manufactured high-bandwidth memory or provided essential infrastructure that enabled its design and manufacturing. The list, therefore, includes companies that offer memory interconnect solutions, HBM controllers, advanced packaging technologies, and semiconductor inspection and testing equipment, among others.

From this list, we selected the top 10 companies that had the highest number of hedge fund investors having a stake in them, based on Insider Monkey’s database of prominent hedge funds as of Q1 2026. Finally, we ranked them in ascending order based on the number of hedge funds holding positions.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).

Note: All share price data in the article is as per market close on June 9.

10. Astera Labs, Inc. (NASDAQ:ALAB)

Number of Hedge Fund Holders: 53

Astera Labs, Inc. (NASDAQ:ALAB) provides the interconnects and memory pooling necessary to make high-bandwidth memory work on AI chips. On June 3, RBC Capital raised its price target on Astera Labs, Inc. (NASDAQ:ALAB) from $270 to $425 while maintaining a Buy rating. The upward-adjusted price target suggests an additional 24% upside from the current levels. This is also the highest Wall Street price target, suggesting RBC is the most bullish firm on ALAB among analysts. On June 4, Mark Lipacis, an analyst at Evercore ISI, also reaffirmed a Buy rating on ALAB and set a target price of $297.

On the same day, Astera Labs, Inc. (NASDAQ:ALAB) also showed positive momentum on the expansion front. The company announced a significant expansion of its Taiwan operations and Cloud Scale Interop Lab, which will increase its engineering and business presence there. Moreover, this will help the company to work more closely with its large cloud customers and technology partners.

In addition, Astera Labs is working with major AI chip companies such as AMD, Arm, Intel, and NVIDIA, as well as Taiwan original design manufacturers like GIGABYTE, Ingrasys, Inventec, Quanta Cloud Technology, and Wiwynn to test and integrate AI systems more efficiently. This collaboration will help bring new AI infrastructure to market faster.

Astera Labs, Inc. (NASDAQ:ALAB) operates as a manufacturer, designer, and seller of semiconductor-based connectivity solutions. The company’s products include cable modules, high-speed mixed-signal connectivity solutions, smart fabric switches, PCIe/CXL smart DSP retimers, and CXL memory connectivity controllers.

9. Credo Technology Group Holding Ltd (NASDAQ:CRDO)

Number of Hedge Fund Holders: 59

On June 2, TD Cowen analyst Sean O’Loughlin raised the firm’s price target on Credo Technology Group Holding Ltd (NASDAQ:CRDO) to $260 from $240 and maintained a Buy rating on the stock. The upwardly revised price target reflects around 11% upside from current levels. The price target revision came after the company announced its Q4 2026 earnings.

Credo Technology Group Holding Ltd (NASDAQ:CRDO) announced its fourth-quarter fiscal 2026 earnings on June 1. The company reported revenue of $437 million, up 7% year over year. This came in above the Wall Street consensus of $433 million. The EPS of $1.16 also exceeded analysts’ expectations. The company’s focus on its optical portfolio has significantly contributed to its revenue growth.

Going forward, the company expects first-quarter fiscal 2027 revenue between $465 and $475 million. The acquisition of Dust Photonics, which was completed on May 28, is one of the factors for the positive outlook. It will expand the company’s optics position with highly differentiated silicon photonics PIC technology.

Credo Technology Group Holding Ltd (NASDAQ:CRDO) develops high-speed connectivity products and solutions for the data infra market (specifically optical and electrical Ethernet and PCIe applications), including SerDes chiplets, integrated circuits, and electrical cables. The company is based in George Town, Cayman Islands, and was founded in 2008 by Chi Fung Cheng and Yat Tung Lam.

8. Cadence Design Systems Inc. (NASDAQ:CDNS)

Number of Hedge Fund Holders: 66

AI chips that require high-bandwidth memory also demand cutting-edge packaging simulation techniques and verification tools. Cadence Design Systems Inc. (NASDAQ:CDNS) provides exactly this, making it a direct beneficiary of the HBM boom.

Among important developments, on June 8, Cadence announced an expanded collaboration with Intel Foundry. This partnership will enable chipmakers to create faster and more efficient chips using Intel’s 14A manufacturing technology. The multi-year agreement combines Cadence’s agentic, AI-driven EDA and Design IP solutions with Intel’s advanced technology, helping customers create semiconductor products more quickly and efficiently. Similarly, on June 1, Wells Fargo analyst Joseph Quatrochi reaffirmed a Buy rating on the stock and assigned a target price of $425.

On May 27, Nay Soe, an analyst at Berenberg, raised the firm’s target price on Cadence Design Systems Inc. (NASDAQ:CDNS) from $400 to $440 and maintained a Buy rating on the stock. Owing to the incredible stock performance over the last month, the stock is closing in on Berenberg’s price target. The firm’s price target still offers about 12% upside from the current levels.

Cadence Design Systems Inc. (NASDAQ:CDNS) is a leading provider of electronic design automation (EDA) software, hardware, and IP used by semiconductor companies to design and verify advanced integrated circuits & systems.

7. Onto Innovation Inc. (NYSE:ONTO)

Number of Hedge Fund Holders: 67

On June 5, Deutsche Bank reiterated its Buy rating on Onto Innovation Inc. (NYSE:ONTO) with a price target of $350. The firm believes that strong demand for chip manufacturing equipment, as a result of high memory bandwidth demand, is supporting the company’s growth. The analyst also expects a significant expansion in semiconductor factory construction over the coming years. Through acquisitions and market share improvements, the company is doing a good job of keeping competitors at bay.

In the first week of June, two more analysts, including Stifel Nicolaus and Oppenheimer, reaffirmed their ratings and price targets on the stock. On June 4, Brian Chin of Stifel Nicolaus reaffirmed a Buy rating on Onto Innovation Inc. (NYSE:ONTO) and assigned a price target of $350. The firm’s price target suggests approximately 27% upside from the current levels. This upside is equal to the median estimate from 10 Wall Street analysts covering the stock. However, Oppenheimer has a slightly higher price target of $370, implying 35% upside from here.

Onto Innovation Inc. (NYSE:ONTO) is involved in the manufacturing, development, design, and support of process control tools used in semiconductor production. Its product offerings include lithography systems and process control analytical software & automated and integrated metrology systems.

6. KLA Corporation (NASDAQ:KLAC)

Number of Hedge Fund Holders: 71

On June 9, UBS analyst Timothy Arcuri raised the firm’s price target on KLA Corporation (NASDAQ:KLAC) from $1770 to $2180 while keeping a Neutral rating. The upwardly revised price target suggests a further 1.9% upside from current levels.

KLA Corporation (NASDAQ:KLAC) began June on a positive note. On June 1, J.P. Morgan said that it sees strong long-term growth potential for the company and believes it could earn $95 per share by 2030. According to the firm, KLAC is benefiting from the rising demand for process control tools. This segment of the semiconductor equipment market is expanding at a faster pace than the broader industry.

J.P. Morgan analyst Harlan Sur stated:

We attribute KLA’s continued share gains to a strong backdrop of leading-edge investments in foundry/logic WFE in CY25, alongside share capture in optical inspection, ebeam inspection/review, advanced packaging wafer-level inspection, and macro defect inspection. We believe KLA remains well-positioned to gain further share moving forward as capital intensity at the leading edge remains elevated and KLAC’s process control tools remain critical to optimizing performance, yield, and costs.

This rising demand was also confirmed by Oppenheimer in May. The firm highlighted that the company’s third-quarter earnings were slightly better than expected but not stronger. This was mainly due to taxes, higher DRAM-related costs, and recent estimate revisions after Investor Day. It also noted that supply and fab capacity constraints are temporarily limiting how much earnings estimates can be increased. This is happening even though demand is stronger and is projected to improve further by 2027.

KLA Corporation (NASDAQ:KLAC) provides process-control and process-enabling equipment, software, and services used in semiconductor wafer, reticle, integrated circuit, packaging, and printed circuit board manufacturing.

Click to continue reading and see the 5 Best High-Bandwidth Memory (HBM4) Value Chain Stocks to Buy According to Hedge Funds.

Disclosure: None. Follow Insider Monkey on Google News.