Not Nvidia. This Chip Stock Has More Upside, According to Wall Street.

Nvidia, the dominant player in the AI chip market, has seen remarkable growth over the past four years, with its market cap expected to reach $10 trillion by 2030 due to heavy spending on AI infrastructure. However, Wall Street believes another chip stock, SK Hynix, could deliver even greater gains. SK Hynix, a leading memory manufacturer, controls significant portions of the dynamic random-access memory (DRAM) and NAND flash markets.

Analysts are more bullish on SK Hynix's growth potential compared to Nvidia, with a median 12-month price target of $250, suggesting an 82% upside, compared to Nvidia's $320 target, implying a 52% jump. SK Hynix's impressive growth is fueled by the AI-fueled demand for memory, resulting in a 257% year-over-year increase in Q2 revenue and a 557% surge in net profit.

The memory supply crunch and price hikes also contributed to this growth. Despite Nvidia reporting a 106% year-over-year revenue increase and 120% growth in non-GAAP earnings, SK Hynix's valuation is significantly cheaper. Moreover, SK Hynix is expected to benefit from the growing high-bandwidth memory (HBM) market, which could reach a staggering $641 billion by 2030, with the company controlling half of this market.

Analysts have increased their EPS growth expectations for SK Hynix over the next three years, and if HBM demand remains strong, the memory market will likely remain undersupplied, benefiting SK Hynix's margins. As a result, investors seeking a fast-growing company with attractive valuation and strong growth potential may consider SK Hynix over Nvidia.