In the first half of the year, memory was the hottest AI trade. Hyperscalers poured billions of dollars into data centers where high-bandwidth memory was one of the tightest bottlenecks in the supply chain. Most of the memory stocks rallied as a result, though the returns have been muted in the second half of the year so far, accompanied by high volatility.
Some on Wall Street say memory makers are sold out till 2030. Others say only till 2028. While the exact status of the industry can be debated, there’s little doubt about the willingness of stock market investors to pay a higher multiple for memory stocks. This debate has been done to death, and memory makers continue to trade at extremely low forward earnings multiples, implying that the earnings cycle has peaked.
So what’s the truth? Is it the end of the boom? Or is the structural shift in the memory business finally here? If you would rather avoid the high-risk nature of AI stocks, particularly memory and storage, you could look at companies that are doing the exact opposite, i.e., bringing in healthy cash flows and carrying low debt in our list of 10 Stocks With Low Debt and Strong Free Cash Flow.
But if you want exposure to the best memory stocks, read on. In my quest for the answer to the above questions, I reached out to a person who regularly interviews industry experts to find out answers to questions like these. I asked a famous Substack and X analyst, P Equity Research, whether ‘this time was really different’. Here’s what he had to say:
There are essentially 3 important conditions these memory makers set in their LTAs: volume, price, duration. They are all negotiating LTAs to fix volume, a price floor, and duration of contract to get rid of past boom and bust cycles in the industry. As long as the Capex cycle holds strong, yes, they are sold out for 2028 and will be potentially beyond that.
If companies have indeed fixed the boom-and-bust nature of the business through LTAs, the next question is whether extra capacity from both US and Chinese memory makers reduces, or even entirely eats up, the margins. The answer to that depends more on the AI capex progress rather than the new supply. As long as companies continue to invest heavily in AI infrastructure, the new capacity should not cause margins to collapse. This is, however, a fear that has already caused the market to go down, leaving some AI infrastructure stocks down over 70% from their all-time highs. P Equity Research also pointed out an added risk:
I would expect spot prices to start sliding from highs over the years, which is completely normal. Will supply of memory remain tight? Yes. Will prices be just as high? I highly doubt it. More supply will increase the bargaining power of the customers by a little, and allow them to renegotiate their LTAs after the current ones expire.
While these risks are real and quite clearly affecting the market, I would like to point out that expecting new entrants to simply add capacity is easier said than done. The only competition is likely to come from China’s CXMT and YMTC, so I put that question to P Equity Research, who had an interesting take on the history of the memory business:
Over the decades, the players in memory have essentially consolidated from around 20 in the 1980s to only 3 today that are well known and in business for a long time, and then came CXMT and YMTC. Why would someone want to enter a business that is historically unprofitable and hard to manage? I would say this is a natural barrier to entry that the memory business has. If someone wants to enter the industry now, it would be too late, in my opinion. CXMT and YMTC have entered due to margins. It’s natural for high-margin businesses to lure competitors, but this is not like the GPU market where Nvidia has high-margin chips and 10 other competitors show up. It’s risky to enter the memory business, and people know that.
So how are billionaire investors treating memory stocks with so much negativity surrounding the business? That’s exactly what I wanted to find out with my article, 10 Best Memory Stocks to Buy According to Billionaires.
Methodology
To come up with my article, 10 Best Memory Stocks to Buy According to Billionaires, I first looked up multiple memory ETFs to list all memory stocks. In this list, I include stocks that derive at least 30% of their revenue from memory-related products and services. My list also bundles memory and storage stocks together. That is because some storage types also utilize memory chips and, more importantly, they face the exact same cyclicality that memory stocks are notorious for. They are listed in ascending order of the number of billionaires holding them in their portfolios.
10. Penguin Solutions Inc. (NASDAQ:PENG)
No. of Billionaire Holders: 13
Penguin Solutions Inc. (NASDAQ:PENG) is reshaping its business to put greater emphasis on AI infrastructure and memory solutions. As part of that strategy, the company has agreed to sell its Cree LED business to private equity firm Transom Capital. This is an all-cash deal and is expected to close in the first quarter of 2027. This business accounts for around 10% of Penguin’s projected fiscal 2027 revenue. Its exit will allow PENG to shift more resources toward AI data centers and memory solutions. These are the markets where it sees stronger growth opportunities.
The strategic shift comes as Penguin’s business is already picking up speed. The company generated $1.73 billion in fiscal 2026 revenue, up 26% from the previous year. Growth accelerated to 58% in the second half of 2026. Its integrated memory contributed $924 million in annual revenue, nearly twice the $464 million reported last year. Management has raised its fiscal 2027 revenue outlook as well. The company now projects around $2.43 billion at the midpoint. That would represent growth of around 40%. The stronger results give investors another reason to pay attention as Penguin puts more emphasis on AI infrastructure and memory. Previously, the stock was featured among our 10 Worst Artificial Intelligence Stocks Under $30 According to Short Sellers, so it does come with its own set of risks. Explore the full list to check which other stocks were named worst AI stocks.
9. Silicon Motion Technology Corporation (NASDAQ:SIMO)
No. of Billionaire Holders: 16
Demand for enterprise and AI storage is growing, and that is making Silicon Motion’s technology more relevant. The company designs NAND flash controllers used in SSDs, data centers, smartphones, and other storage devices. In the third quarter of fiscal 2026, revenue jumped 131% year over year to $560 million. Non-GAAP earnings per ADS came in at $4.35, up 333% from a year earlier. Gross margin also improved to 53.7%. The company’s Ferrari and boot drive solutions also grew more than 75% sequentially, which shows demand beyond traditional SSD controllers.
Through its MonTitan controller platform, Silicon Motion Technology Corporation (NASDAQ:SIMO) is expanding in enterprise storage. It has finalized the design for its next-generation 4nm PCIe 6 controller. The chip targets hyperscalers and cloud service providers, and sampling is expected to start in early 2027. Management guided fourth-quarter revenue of $588 million to $616 million. Moreover, the company said strong demand and its growing product portfolio should support further growth. So far in 2026, the stock performed well enough to secure a spot in our list of 10 Best Performing Growth Stocks So Far in 2026.
On the ownership side, billionaire Abigail Johnson’s FMR LLC reported a position of 2.28 million shares at the end of the second quarter of 2026.
8. Rambus Inc. (NASDAQ:RMBS)
No. of Billionaire Holders: 17
Rising demand for high-speed memory in AI servers and data centers is creating growth opportunities for Rambus Inc. (NASDAQ:RMBS). The company reported record third-quarter 2026 revenue of $218 million, representing 22% annual growth. Non-GAAP earnings per share climbed to $0.84 from $0.62 in the same period last year. Product revenue grew 22% to $114 million, supported by strong demand for DDR5 memory-interface chips and growing adoption of its newer products.
The company’s future growth prospects also look strong. It has secured design wins for next-generation high-bandwidth memory (HBM) and started sampling its sixth-generation DDR5 register clock driver, which supports speeds of up to 9600 MT/s. For the fourth quarter, management expects revenue to reach $227 million to $233 million, which would mark another record. The main challenge is supply. Management expects tight conditions to continue into 2027, potentially limiting how quickly Rambus can meet growing demand.
Billionaire investor Stanley Freeman Druckenmiller also showed interest through Duquesne Family Office. The firm reported a 173,000-share stake worth about $23 million at the end of the second quarter of 2026.
7. FormFactor Inc. (NASDAQ:FORM)
No. of Billionaire Holders: 25
FormFactor’s latest results reflect the growing need for semiconductor testing equipment as AI and high-performance computing demand expands. In the third quarter, revenue reached $280.5 million, up 38.4% year over year. Non-GAAP earnings more than tripled, rising to $1.04 from $o.33. Meanwhile, its Systems segment generated record revenue of $59.5 million, driven by strong demand for TRITON systems used in co-packaged optics.
FormFactor is also strengthening its position through an expanded partnership with Teradyne. Under the agreement, Teradyne is investing $300 million in FormFactor. Both companies will collaborate on testing solutions for advanced semiconductor applications such as co-packaged optics and high-bandwidth memory. FORM is also expanding its manufacturing capacity. The company’s new Farmers Branch facility has already started shipping production equipment to customers. However, investors should keep in mind that third-quarter gross margin received a boost from tariff refunds and favorable component costs. Management does not expect these benefits to repeat. This puts future margins in focus as the company expands. The stock ranked 5th on our list of 10 Most Buzzing AI Semiconductor Stocks to Buy in 2026.
6. Western Digital Corporation (NASDAQ:WDC)
No. of Billionaire Holders: 31
Western Digital Corporation (NASDAQ:WDC) gives investors exposure to growing demand for data storage as AI and cloud computing drive the need to store more information. The company’s business specializes in hard disk drives (HDDs), which continue to serve a key role in large data centers. In its fiscal first quarter of 2027, revenue rose 55% year over year to $4.4 billion. Gross margin reached 58.1%. It generated $1.4 billion in free cash flow, supported by strong demand and improved profitability.
Despite delivering a strong quarter, the stock came under pressure after management said capital spending would remain slightly above its typical range of 4% to 6% of revenue over the next two years. However, several analysts believed investors had overreacted. Morgan Stanley’s Erik Woodring reaffirmed his Overweight rating and raised his price target from $643 to $668. He argued that the additional investment is necessary to expand production capacity and support newer drive technology. Although the additional spending could prepare WDC for stronger future demand, investors will want evidence that it leads to higher shipments and stronger margins.
AQR Capital Management, led by billionaire investor Cliff Asness, owned 2.94 million WDC shares at the end of the second quarter of 2026. The firm reduced its position during the quarter, but the holding still puts Western Digital among billionaire-backed stocks. The stock is also ranked among our 10 Best and Cheap Stocks to Buy Heading into 2027. Meanwhile, the market continues to weigh the costs of expanding production capacity.
5. Seagate Technology Holdings plc (NASDAQ:STX)
No. of Billionaire Holders: 31
Seagate Technology Holdings plc (NASDAQ:STX) is well positioned to benefit from the expanding need for data storage as AI and cloud infrastructure require more capacity. Its fiscal Q1 2027 results highlight the strength of this demand. Revenue rose 61% from a year earlier to $4.2 billion. On a non-GAAP basis, earnings per share grew 194% to $7.68. Data center sales contributed $3.4 billion, and Seagate delivered a record 198 exabytes of nearline capacity. For the December quarter, management expects revenue to reach approximately $4.8 billion.
The stock fell 5% despite the strong quarterly results. Investors were concerned that shipment growth fell short of expectations. However, Bank of America reiterated its Buy rating and $1,200 price target, considering the slowdown temporary as the company shifts to newer HAMR technology. The stock is also featured among our 10 Oversold AI Stocks: Where Wall Street Analysts Are Spotting 50%+ Upside, which further supports BofA’s bullish view.
Seagate also attracted a new investment from Tiger Global Management. The firm, led by Chase Coleman, held approximately 285,100 shares worth $275.1 million at the end of Q2 2026. This makes STX another storage stock backed by a billionaire investor.
4. SanDisk Corporation (NASDAQ:SNDK)
No. of Billionaire Holders: 34
SanDisk Corporation (NASDAQ:SNDK) gives investors exposure to the other half of the memory shortage: NAND flash. This is the storage technology that keeps your data safely stored even if the device is turned off. In the context of high-bandwidth memory technology, SanDisk helps store the massive amounts of data that are loaded into HBM. The stock is number 4 on our list and is the only US-based NAND flash maker apart from Micron.
The company was spun off from Western Digital in 2025, leaving it as a pure-play flash business, which is why it gets so much attention from investors looking for a high-risk, high-return bet on memory and storage. China’s YMTC is one of the two new Chinese entrants that the expert named, but here’s the scarier part. Historically, NAND has been way more cyclical than DRAM, so if hyperscaler capex slows, SanDisk is likely to be worse off. For now, retail investors and billionaires alike continue to bet on this high-risk stock. SanDisk was also one of the 11 AI Stocks That Will Go to the Moon.
3. Lam Research Corporation (NASDAQ:LRCX)
No. of Billionaire Holders: 39
Lam Research Corporation (NASDAQ:LRCX) is well positioned to benefit from demand tied to AI infrastructure and advanced memory technology. The company generated $8.22 billion in revenue for the September quarter, up 54% year over year. Non-GAAP earnings per share also climbed 77% to $2.20. Going forward, management projects December quarter revenue to reach approximately $8.6 billion.
The longer-term demand outlook also looks favorable for LRCX. The company forecasts wafer fabrication equipment spending of more than $200 billion in 2027. DRAM is expected to lead industry growth, followed by advanced foundry and NAND. These trends should create further demand for the deposition and etch tools the company supplies. However, the sustainability of AI infrastructure spending remains a concern. If customers reduce their investment plans, demand could weaken. Lam Research generates nearly half of its revenue from sales to memory makers. Consequently, the stock’s price action mirrors that of the memory companies.
At the end of Q2 2026, billionaire Philippe Laffont’s Coatue Management held approximately 9.44 million Lam shares valued at $4.1 billion. The fund had trimmed its holding during the quarter.
2. Applied Materials Inc (NASDAQ:AMAT)
No. of Billionaire Holders: 39
Applied Materials doesn’t manufacture any memory chips, but it is still the second-best stock on our list of the 10 best memory stocks to buy according to billionaires. That’s because it provides most of the things that allow manufacturers to build the memory chip. This includes thermal management solutions, etching tools, and deposition equipment that are essential for any DRAM or NAND chip. While the business is usually less volatile compared to memory, the stock has lost almost half its value in just under 5 months, and nearly one-third of its value in the last 30 days.
Despite the recent concerns, semiconductor equipment makers are expected to do well. Jefferies analysts think growing AI adoption will slowly fight off all the concerns over slowing hyperscaler capex, power infrastructure, and delays in data center construction. The firm has lowered its 2028 wafer fabrication market estimates from $250 billion to $220 billion, but even the low estimates should provide strong growth heading into the next two years. If the slowdown in growth concerns you, you could also look at our 10 Best Aggressive Growth Stocks to Buy According to Wall Street Analysts.
1. Micron Technology Inc (NASDAQ:MU)
No. of Billionaire Holders: 41
Micron tops the list of the 10 Best Memory Stocks to Buy According to Billionaires. That’s not surprising considering it is the only US-based manufacturer of high-bandwidth memory(it actually only holds about 20% market share in the global HBM business). As a result of its US manufacturing base, it is also a beneficiary of the CHIPS Act. The company is reshaping its business around data center customers as opposed to its previous consumer business, and the long-term agreements that the expert pointed out provide the right base to execute that shift, in addition to the government support via the CHIPS Act.
The biggest risk with Micron is hyperscalers cutting capex, a risk that all memory makers continue to carry. Clearly, billionaires think Micron is the best placed to survive through that risk. They aren’t the only ones backing Micron, though. The company also made it to our list of 10 Stocks That Will Go to the Moon According to Reddit, suggesting retail investors are equally confident about the company’s future prospects. The stock is trading at a forward P/E of 4.8x, a multiple that prices in all the risks I have pointed out in my article.
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