KEY POINTS
- Samsung just posted a record US$58 billion quarterly profit, confirming demand for AI memory chips is booming.
- The read-through is strongest for Micron (NASDAQ:MU), the US memory play, which recently posted its own record results.
- But chip stocks have run hard: Micron has surged roughly 7x over the past year, while AMD nearly tripled and Intel more than doubled in value last quarter.
- With investors like Michael Burry warning of a bubble, we believe the boom is real but the easy gains are behind us.
AI chip stocks have been the market’s biggest winners in 2026, and Samsung just gave the bulls more ammunition. The Korean giant posted a record US$58 billion quarterly profit, proof that demand for AI memory chips is running red hot. Yet many of these stocks have already soared, and warnings of an AI bubble are getting louder. So the real question for investors is not whether the boom is real. It clearly is. It is whether, after such huge gains, the rally is now getting stretched.
The Boom Is Real: Record Profits Confirm the Demand
Here is the good news. Samsung’s profit jumped 19-fold as AI data centres soaked up memory chips faster than makers could supply them. Prices are surging, with DRAM up 44% and NAND up 53% in a single quarter. This is not hype; it is showing up in hard earnings.
The clearest winner for US investors is Micron (NASDAQ:MU), which makes the same high-bandwidth memory and recently posted its own record quarter, with profit up around 15 times on a year ago. In our view, this confirms the memory boom is industry-wide and durable, not a one-company story. It also supports the wider chip complex, since strong memory demand signals AI spending remains healthy for names like Nvidia (NASDAQ:NVDA), AMD and Broadcom.
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But Valuations Are Flashing Warning Signs
Here is the catch. These gains have been enormous. Micron has surged roughly 7x over the past year, while AMD (NASDAQ:AMD) nearly tripled and Intel (NASDAQ:INTC) more than doubled last quarter, together adding hundreds of billions in market value. This suggests much of the good news is already priced in.
The doubters are growing louder too. Investor Michael Burry, famous for calling the 2008 crash, recently declared “the end is nigh” for the AI trade and bet against Micron. And in June, the big tech “Magnificent Seven” lost roughly US$2.3 trillion in value as investors questioned whether all this AI spending will ever turn into profit. The concern is not demand today, but how long it can keep growing at this pace.
What It Means for Investors
So how should you play it? We believe the smartest approach now is to be selective rather than buy the whole sector. Memory names like Micron have the strongest earnings support, but they are also the most extended after their runs. Nvidia, interestingly, has been the laggard, roughly flat this year, which leaves its valuation looking more reasonable than many of its high-flying peers.
Our view: the AI chip boom is real and backed by record profits, but chasing these stocks straight after such huge gains is risky. The bull case needs AI spending to keep climbing; the bear case is any sign it is slowing. For patient investors, a better entry may come on the next bubble-fear pullback, like the sharp dips these stocks have already shown.
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