Nvidia is one of the 'three horsemen of AI.' Here are the others.

By Emily Bary

Broadcom and Micron have distinguished themselves enough to earn a place alongside Nvidia as AI leaders, by one analyst's assessment

Nvidia Corp is the undisputed leader in artificial-intelligence hardware. But two other companies have distinguished themselves enough lately to join Nvidia in forming what a Mizuho analyst calls the "three horsemen of AI."

Those are Broadcom Inc. (AVGO) and Micron Technology Inc. (MU), which have seen their shares log impressive runs of their own lately, enough to harken back to the dot-com era, when Microsoft Corp. (MSFT), Intel Corp. (INTC), Cisco Systems Inc. (CSCO) and what was then called Dell Computer (DELL) had such a strong market impact that they earned the Four Horsemen moniker.

But back to the present. Broadcom's stock on Tuesday snapped a seven-session winning streak that had seen it rise more than 28%, catapulting the company above both the $700 billion and $800 billion market-cap thresholds in that short span.

Read: Nvidia is now the largest U.S. company - and five years ago it wasn't even in the top 20

And the smallest of the three has become arguably the most interesting lately. Micron shares have gained in seven of the past eight trading sessions, rallying about 18% over that span. The company finished Tuesday with a roughly $170 billion market capitalization.

While some AI-linked stocks have seen big boosts recently in the lead up to earnings - only for those results to fall short of high expectations - there's thinking that the case might be different for Micron, which is due to report next Wednesday.

Micron's "results next week feel more like a positive catalyst" versus "sell-the-news" or disappointment, Mizuho desk-based analyst Jordan Klein wrote in a Tuesday note to clients.

That's because he expects executives "will go out of their way to talk up improving demand, tight industry supply, further upside in pricing and an acceleration of their 'leading' HBM DRAM" for Nvidia (NVDA) and other AI chip players. Dynamic-random access memory, or DRAM, is a type of storage chip, and high-bandwidth memory, or HBM, is a kind of DRAM offering that's seeing growing interest thanks to the requirements of AI applications.

There's a bit of a "FOMO chase" in memory, according to Klein, referring to the "fear of missing out."

Wedbush's Matt Bryson was similarly upbeat about Micron's potential to impress investors. He and his teams "expect only positive news for [Micron's] financials for some time to come, and expect the stock will continue to lift until we see a change in industry investment plans."

See more: Micron's stock extends rally as analyst expects 'only positive news'

-Emily Bary

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06-20-24 0458ET

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