Investing.com — Mizuho analyst Jordan Klein highlighted six semiconductor stocks that he considers essential amid strong demand trends, especially in artificial intelligence (AI) and memory markets.
In a note to clients, Klein picked out Nvidia (NASDAQ:NVDA), Micron (NASDAQ:MU), Western Digital (NASDAQ:WDC), Onto Innovation (NYSE:ONTO), Dell (NYSE:DELL), and Taiwan Semiconductor Manufacturing Company as names he is bullish on.
Nvidia (NVDA): Nvidia remains a “must-own long” in tech, says Klein, who notes that Nvidia’s addition to the Dow Jones Industrial Average and a surge in demand for its GPUs further bolster the stock.
Recently, Nvidia asked Hynix to accelerate the production of HBM4 DRAM by six months, pushing the timeline to late 2025. This request is said to highlight Nvidia’s strong outlook for AI-powered GPUs, which require advanced memory architectures. Mizuho maintains an Outperform rating on Nvidia.
Micron (MU) and Western Digital (WDC): Despite a recent pullback, Klein is a “big bull” on memory stocks Micron and Western Digital.
The analyst said the market anticipates Samsung (KS:005930)’s progress on HBM3e, but Klein believes it won’t significantly impact Micron’s prospects.
“Buy MU on weakness,” he advises, as Micron aims to boost HBM output and secure a greater share of Nvidia’s orders. Mizuho rates Micron and Hynix Outperform, expecting both to remain dominant suppliers for Nvidia in 2025.
Onto Innovation (ONTO): This small-cap semiconductor equipment provider is “a direct winner from AI semi capex,” according to Klein. Though Onto fell after earnings, Klein views this as a buying opportunity, given the company’s role in supplying equipment to Hynix for HBM production.
He sees Onto benefiting as Nvidia demands greater HBM capacity, driving inspection and metrology equipment sales in 2025. The stock has been “favorite long idea” for Klein.
Dell (DELL): Dell also remains a top long idea at Mizuho. Klein said Dell has “share gain potential” in AI server markets, particularly as Nvidia steps in to support Dell’s competitor Supermicro with order fulfillment.
He believes Dell’s liquid cooling tech and financial stability position it well to capture market share. Mizuho rates Dell Outperform.
Taiwan Semiconductor Manufacturing Company (TSM): TSM is one of Klein’s “top long idea in semis” and all tech for 2025 due to its market dominance and favorable pricing power. Klein highlights TSM’s resilience amid Samsung’s significant foundry downsizing, which could further solidify TSM’s market position. TSM remains Outperform-rated at Mizuho.
