3 Ways to Invest in the Booming Memory Market

The memory market is booming, with TrendForce recently raising its global memory forecasts for both 2026 and 2027. It now sees the market hitting $889.3 billion in 2026, with $618.7 billion coming from DRAM (dynamic random-access memory) and $270.6 billion from NAND (flash). That's up from a prior outlook of $551.6 billion. For 2027, it raised its forecast from $842.7 billion to $1.28 trillion.

Both the DRAM and NAND markets have been seeing prices surge due to a demand-supply imbalance, stemming from the artificial intelligence (AI) infrastructure build-out. Graphics processing units (GPUs) and other AI chips need to be packaged with high-bandwidth memory (HBM), a specialized form of DRAM, to optimize performance, and the shift toward inference and agentic AI is increasing demand. In turn, with DRAM manufacturers focused on producing high-margin HBM, prices for ordinary DRAM have also gone through the roof.

NAND prices have also been flying higher. The industry cut back production after flash prices crashed following the pandemic, and it has been slow to come back online, with the big memory makers largely focused on DRAM and HBM. At the same time, demand for huge solid-state drives (SSDs) that use flash has been soaring due to AI.

Let's look at three ways investors can play the torrid memory market with two semiconductor stocks and one exchange-traded fund (ETF).

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1. Micron

Micron (NASDAQ: MU) is one of the world's big three DRAM makers, and the only one based in the U.S. About 80% of its revenue comes from DRAM, with the rest largely from NAND.

The company has been riding the memory wave, with surging revenue and ballooning gross margins. Last quarter, saw its revenue nearly triple to $23.9 billion, while its gross margins climbed from 36.8% a year ago to 74.4%. That led to its adjusted EPS skyrocketing from $1.56 a year ago to $12.20 in its fiscal Q2.

With demand soaring, Micron has started to move toward signing long-term multiyear deals for the first time. This should help reduce some of the cyclicality of its business and provide it with better visibility. Meanwhile, the stock is not pricey, trading at a forward P/E of just 9 times fiscal 2027 analyst estimates.

2. Sandisk

Sandisk (NASDAQ: SNDK) is a pure play on NAND flash. Similar to the dynamics with DRAM, it is also seeing surging prices driving revenue higher and expanding gross margins.

For its fiscal Q3, the company's revenue soared 251% year over year to $6 billion, as data center revenue rocketed 645% to $1.4 billion. Gross margin, meanwhile, climbed from 22.5% a year ago to 78.4%. This led to its adjusted EPS going from a loss of $0.30 to a profit of $23.41.

Similar to Micron, Sandisk also started signing long-term deals. It currently has five deals in place covering a third of its capacity in fiscal 2027, with the longest deal extending five years. The deals include both fixed and variable pricing and have protections in place. The company is also starting to develop high-bandwidth flash (HBF), which could be a big growth driver in the coming years.

Sandisk stock is also not expensive, trading at a forward P/E of just 9 times the fiscal 2027 analyst consensus (ending June 2027).

3. DRAM - Roundhill Memory ETF

Another great way to play the memory market is with the DRAM - Roundhill Memory ETF (NYSEMKT: DRAM). The nice thing about the exchange-traded fund is that it gives investors exposure to the big international memory companies. While Micron is one of the big three memory makers, Korean companies SK Hynix and Samsung are generally viewed as the market leaders.

Currently, Micron makes up 30% of the ETFs' holdings, followed by SK Hynix at 24.5%, and Samsung at 18.4%. SK Hynix currently doesn't have American Depository Receipts and thus doesn't trade in the U.S. However, it is perhaps the best-positioned of the companies, having a close relationship with Nvidia and recently entering a multiyear partnership with the chip giant to co‑develop next‑generation memory. It also reportedly supplies more than 60% of Nvidia's HBM4 volumes for its Vera Rubin platform. The DRAM ETF is one of the best ways to invest in the company.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.