2 AI Chip Stocks to Buy in March

As artificial intelligence (AI) continues to revolutionize various industries, the demand for advanced AI chips is surging. Two chip stocks, in particular, are well-positioned to capitalize on this trend and potentially soar in 2025: Micron Technology (MU) and Taiwan Semiconductor Manufacturing (TSM). Let's dive into the reasons why these stocks could be strong performers in the coming year.

1. Micron Technology (MU)
Micron Technology is a leading provider of memory and storage solutions, with a strong presence in the AI market. The company's advanced memory and solid-state storage (SSD) products are essential for high-performance computing and AI workloads. Here's why MU could soar in 2025:

- Growing demand for AI workloads: As AI adoption accelerates, the need for high-bandwidth memory and fast storage solutions increases. Micron's products are well-positioned to meet this demand, driving revenue growth.
- Record revenue and earnings growth: Micron achieved record revenue in the most recent quarter, with operating leverage allowing for higher profits. The company's outlook calls for record revenue this year, with growth in earnings and positive free cash flow.
- Expanding market for high-bandwidth memory: Long term, management expects the market for high-bandwidth memory to grow from $16 billion in 2024 to over $100 billion by 2030. This growth opportunity positions MU for long-term success.



2. Taiwan Semiconductor Manufacturing (TSM)
TSMC is the world's leading foundry, manufacturing chips designed by other companies. Its customer list includes Nvidia, AMD, Qualcomm, and Apple, positioning it well for AI chip demand. Here's why TSM could soar in 2025:

- Growing demand for AI server chips: TSMC expects 2024 revenue to be up nearly 30% in U.S. dollars, with revenue from AI server chips tripling. While AI server chips represent only a mid-teens percentage of revenue, the strong demand is also leading to improving margins and earnings growth prospects.
- Expanding global manufacturing footprint: TSMC is expanding its global manufacturing footprint across the U.S., Japan, and Europe to support demand for advanced chips in the coming years. This expansion reflects management's view that demand for AI-related applications is just beginning.
- Strong financial performance: TSMC's forward P/E of 23, high returns on capital, and steady growth prospects support its valuation. The company's strong financial performance makes it an attractive investment opportunity.



In conclusion, both Micron Technology (MU) and Taiwan Semiconductor Manufacturing (TSM) are well-positioned to capitalize on the growing demand for AI chips in 2025. Their strong product pipelines, expanding market opportunities, and robust financial performance make them compelling investment opportunities in the AI chip sector.