Street Calls of the Week
Investing.com -- Morgan Stanley has identified best AI stocks to buy now, noting that AI stock leadership is expanding beyond traditional players into commodity memory segments.
According to the investment bank, the AI investment landscape is shifting value from hardware to applications, with AI semiconductor forecasts showing impressive 22-55% compound annual growth rates through 2030.
The bank’s analysis points to several standout performers in this evolving market:
SanDisk emerges as Morgan Stanley’s top U.S. pick in the memory space, with analysts expressing a clear preference for NAND over DRAM technology. The bank recently elevated SanDisk to a "Top Pick" status, highlighting its strong positioning in the NAND market that is expected to benefit from increasing AI applications.
Analysts also see potential benefits for SanDisk from new export regulations that are expected to affect memory chip production and pricing.
ASML receives an Overweight rating from Morgan Stanley, with analysts noting its substantial memory exposure (39% of revenue in 2024 and 36% in first half of 2025). The bank believes ASML is well-positioned to benefit as the memory cycle improves, particularly in the DRAM segment.
ASML announced it will lead a €1.3 billion investment in the artificial intelligence company Mistral AI, which includes a strategic partnership to explore AI applications for its products.
Morgan Stanley also favors SK Hynix with an Overweight rating, suggesting that HBM (High Bandwidth Memory) downside risks are already well understood by the market. Analysts anticipate a shift toward a commodity upcycle in 2026, with NAND particularly benefiting from Solidigm.
SK Hynix recently received positive outlook revisions from both S&P Global Ratings and Fitch Ratings, citing its leading position in HBM chips.
Meanwhile, Samsung Electronics stands as Morgan Stanley’s top pick in this category, citing its turnaround potential and optionality in both HBM and humanoid technologies.
Samsung has reportedly passed Nvidia’s qualification test for its 12-layer HBM3E product.
KIOXIA earns Japan Top Pick status from Morgan Stanley, with analysts describing it as an "idiosyncratic re-rating opportunity." This assessment is driven by the company’s BiCS-8 technology, which combines planar shrinkage, new architecture (CBA), and multi-level cell technology to achieve higher density with lower capital expenditure requirements.
Morgan Stanley recently upgraded KIOXIA Holdings to Overweight, and the company is reportedly planning its first dollar bond sale to raise up to $3 billion.
KLA Corporation rounds out Morgan Stanley’s favorites with an Overweight rating. The bank identifies KLA as the "biggest beneficiary" of TSMC’s investments and points to rising process control intensity in DRAM as key drivers for the company’s growth potential.
In a recent earnings report, KLA Corporation announced fourth-quarter revenue of $3.18 billion and a non-GAAP diluted EPS of $9.38, both surpassing analyst estimates.
As AI applications continue to proliferate across industries, Morgan Stanley’s analysis suggests that memory manufacturers are increasingly well-positioned to capture value in the expanding AI ecosystem. Hence, the research firm is recommending that investors should own these 6 AI stocks in 2025.
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