Key Takeaways
- Micron Technology and Applied Digital are two companies that are benefiting from bottlenecks in the artificial intelligence (AI) infrastructure buildout.
- The memory industry is experiencing a shortage of high-bandwidth memory (HBM) modules, which are essential for AI chips to operate at their fullest potential.
- Applied Digital is benefiting from the need for cheap power in AI infrastructure, with a focus on building and operating data centers specifically designed for training large language models (LLMs) and inference.
- Both companies are well-positioned for growth due to their unique strengths and strategic partnerships.
Introduction to AI Bottlenecks
The bull market is continuing to roar higher, led by artificial intelligence (AI) stocks. As AI infrastructure spending continues to soar, bottlenecks in the industry are starting to develop, creating clear-cut opportunities for some companies to benefit. One of the largest AI bottlenecks right now is memory, with Micron Technology (MU) being one of the best-positioned companies to benefit from the current dynamics in the memory industry. As the article notes, "Graphics processing units (GPUs) and other AI chips depend on high-bandwidth memory (HBM) to operate to their fullest potential."
Micron Technology’s Advantage
Micron Technology is involved in both the DRAM (dynamic random access memory) and NAND (flash memory) markets, making it a key player in the memory industry. The company’s entire HBM capacity is sold out for this year, and it has doubled its construction capital expenditures (capex) to increase production for both HBM and DRAM. As the article states, "HBM needs up to four times the wafer capacity of regular DRAM. This is leading to lower overall DRAM supply and increased prices." Micron is already seeing the benefits of increased prices, and that should continue to be a huge driver for the company for the foreseeable future.
Applied Digital’s Opportunity
Another big bottleneck in AI infrastructure is access to cheap power. Applied Digital (APLD) is benefiting from this dynamic, with a focus on building and operating data centers specifically designed for training LLMs and inference. The company was previously a Bitcoin miner, which is where it learned the ins and outs of sourcing cheap power and building out large hosting campuses. As the article notes, "It has now turned its focus to AI data centers. After spinning off its cloud computing business and merging it with EKSO Bionics Holding to form a new company called ChronoScale, Applied Digital is looking to convert to a data center real estate investment trust (REIT)." Applied Digital has secured financing and is aggressively building out new facilities, with a goal of supporting 400 megawatts of power at its Polaris Forge 1 campus by 2027.
Growth Ahead for Applied Digital
Applied Digital has huge growth ahead of it, and the company looks well-positioned, given its backing from Macquarie Group, which is helping provide much of the financing for these large data center projects. As the article states, "The company just completed the first building, supporting 100 megawatts of power, at its Polaris Forge 1 campus, which is being built to support CoreWeave. That campus will grow to 400 megawatts by 2027, and it has also added a 200-megawatt customer at its Polaris Forge 2 campus." With its focus on building and operating data centers specifically designed for AI infrastructure, Applied Digital is poised to benefit from the growing demand for cheap power in the industry.
Conclusion and Future Outlook
In conclusion, both Micron Technology and Applied Digital are well-positioned to benefit from the bottlenecks in the AI infrastructure buildout. With the memory industry experiencing a shortage of HBM modules and the need for cheap power in AI infrastructure, these companies are poised for growth due to their unique strengths and strategic partnerships. As the article notes, "The bull market continues to roar higher, led by artificial intelligence (AI) stocks. As AI infrastructure spending continues to soar, bottlenecks in the industry are starting to develop, and that’s creating clear-cut opportunities for some companies to benefit." With their focus on addressing these bottlenecks, Micron Technology and Applied Digital are two companies to watch in the AI industry.
https://www.fool.com/investing/2026/01/15/top-artificial-intelligence-ai-stocks-bull-run-mu/