This week, we are taking a look at 3 AI chip ‘shovels’ and examining their investment case and risks.

There is a lot of talk on the AI bubble again.

And investors are once again, cashing out and cashing in again.

A lot is up in the air.

Let us help you make the air clearer from here with this week’s research.

Before we proceed, we have some interesting content this week that might change how you think about your portfolio!

Towkay Talk

Stock Rundowns

IPOs

Cheers,
InvestKaki Team 🤜🤛

Moving on, here are the news that shocked the world…

Micron $MU ( ▼ 6.69% ): Micron is hitting the gym and getting swole. Latest financial results show that revenue quadrupled to US$42 billion on the back of booming demand for memory chips. It projects next quarter revenue to be US$50 billion [Read More]

Qualcomm $QCOM ( ▼ 7.57% ): Qualcomm has upped its non-handset revenue forecast to US$40 billion for 2026 from a previous US$22 billion, as it targets US$15 billion in data centre sales [Read More]

Zeta X Palantir $ZETA ( ▲ 6.15% ) $PLTR ( ▲ 5.28% ): Zeta is collaborating with Palantir to build an integrated enterprise AI application to service companies looking for data heavy marketing solutions [Read More]

Blackberry $BB ( ▲ 10.25% ): Blackberry is still alive and kicking, and surpassed expectations. Revenue for the latest quarter grew by 25%, boosted by QNX and Secure Communications segment [Read More]

FedEx $FDX ( ▼ 3.31% ): FedEx latest results beat expectations. Revenue was up as its volume increased by 3% in the U.S. It now projects revenue to grow by 11% for the full year [Read More]

Here are the news covering the Asia market…

Trip $TCOM ( ▲ 0.99% ): Tripdotcom is not having a good day. It is now guiding for a revenue slowdown for 2Q 2026 and a significant fine from an ongoing trust probe by the Chinese authorities [Read More]

SingTel: SingTel sold a 2.8% stake in Thailand’s biggest energy firm, Gulf Development for SG$1 billion and a gain of SG$140 million. It will probably use that proceed to fund its AI and data centre investments [Read More]

Frasers Property: Fraser Property will sell its hospitality assets worth SG$1.1 billion to the children of Charoen Sirivadhanabhakdi. Charoen controls Fraser Property, hence, this is regarded as a move to transfer assets among its family companies [Read More]

OUE REIT: OUE REIT is divesting Crowne Plaza Changi Airport for SG$500 million to a JV between its sponsor, OUE and Tokyo Century Corp. [Read More]

Temasek: Temasek is appointing Wendy Koh as its Chief Financial Officer to replace Png Chin Yee. She is currently the Group CFO of Mapletree Investment [Read More]

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SK Hynix produces and sells high-bandwidth memory (HBM), DRAM and NAND chips. They are now being used mainly for AI and data centres to increase computing power.

👆 What is up: Recently, SK Hynix dethroned Samsung to be the biggest company by market capitalisation in South Korea. It is now also expressing interest to have a secondary listing in the United States under the American Depository Receipt stocks, and raise about US$29 billion.

Hence, investors might have access to them in the U.S. markets soon.

💪 Investment Case: Have exhibited phenomenal growth in HBM chip sales in the past year. AI demand is skyrocketing as they chase more and more computing power.

Revenue has tripled from KRW17.6 trillion in 1Q 2025 to KRW52.6 trillion in 1Q 2026, and this has generated higher efficiencies. Net profit margin has improved from 46% to 77% over the same period.

SK Hynix also controls about 61% of the HBM market, giving it the most dominant position against its rivals. HBM memory shortages are still severe, giving SK Hynix a strong pricing power.

⚡ What to be careful about: Abrupt sell-off of global AI stocks driven by investor sentiments over AI valuation concerns. SK Hynix share price declined by 12.5% on 23 June. It subsequently rebounded back up on 25 June, just to decline by 8.4% again on 26 June.

Get ready for some see-saw in share price.

❓ Market Analysts: Target price of KRW3.05m with an implied upside of +16.0%

Micron Technology also sells HBM, DRAM and NAND chips, and also storage solutions such as data centre solid state drive.

👆 What is up: 3Q 2026 results are out and it’s looking good. Revenue has tripled to US$41.5 billion, driven by DRAM (+343%) and NAND (+361%) sales. Profits have grown by 10 times also to US$28.9 billion, giving Micron a whopping profit margin of 70%.

💪 Investment Case: 3Q results are of course a big catalyst. However, the DRAM and NAND supply shortage still persists, providing pricing power for Micron in these both fields. Even its SSD for data centre revenue has doubled to US$5 billion.

Valuations do not look particularly expensive, with price-to-earnings at 27 times.

⚡ What to be careful about: Same with SK Hynix. Abrupt sell-off of global AI stocks driven by investor sentiments over AI valuation concerns. Valuations look cheap now, because its profits have grew by 10 times from a year back. The big question is whether this can hold up for the next year.

❓ Market Analysts: Target price of US$1.37k with an implied upside of +12.7%

Qualcomm sells a myriad of products and components across different industries, but recently have been selling more connectivity related products in the data centre segment.

👆 What is up: It has raised its non-handset revenue target for 2026 from US$22 billion to US$40 billion. Data centre revenue is projected at US$15 billion.

💪 Investment Case: Qualcomm is riding that AI revenue boom similar to SK Hynix and Micron. Recently, it has announced a collaboration with Meta to develop CPU products supporting Meta ecosystem.

Most importantly, its data centre CPU, the Qualcomm Dragonfly™ C1000, will be used to power Meta’s future data centre expansion.

Valuation-wise, it is trading at relatively cheap valuations with a PER of 21 times compared to industry average of 60 times.

⚡ What to be careful about: Same with SK Hynix and Micron, but Qualcomm’s involvement with Meta is a risk. Meta has invested heavily in its AI division but still do not exhibit any tangible return on investment.

❓ Market Analysts: Target price of US$213 with an implied upside of +4.0%

And that’s a wrap!

Cheers,
James Yeo~