Memory Chips Are the Best Bet! Top Fund Manager Declares: Market Is Underestimating AI Demand

Divya Mathur, emerging markets equity portfolio manager at ClearBridge Investments (a Franklin Templeton active equity specialist), says memory chips will be the top investment play over the next decade as artificial intelligence continues to drive massive chip demand.

 

ClearBridge’s SMASh Series EM Fund, co-managed by Mathur and focused on emerging market stocks (approx. $1.4 billion AUM), outperformed 97% of peers over the past year.

 

The fund is heavily invested in Samsung Electronics and SK Hynix—Samsung shares more than doubled in 2025, while SK Hynix surged about 274% for the full year.

 

Mathur expects both stocks to keep climbing. She argues AI is permanently transforming the memory chip industry, long viewed as highly cyclical and commoditized.

 

“The memory industry wasn’t originally built for AI memory demand—but in roughly the past year we’ve gained a brand-new growth engine,” Mathur said.

 

She has held both names since 2015 and is more confident than ever.

 

In 2025, SK Hynix delivered blockbuster results as the world’s primary supplier of high-bandwidth memory (HBM) for Nvidia’s AI accelerators.

 

Samsung’s profit more than tripled in the quarter ended December, hitting a record high, fueled by soaring demand for AI servers that drove memory prices sharply higher.

 

Mathur believes the market still significantly underestimates AI’s huge memory appetite. She notes several U.S. tech companies now describe the memory cycle as “year two of a ten-year upcycle.”

 

Compared with U.S. peers, Asian AI-related names still trade at reasonable valuations. Samsung and SK Hynix trade at forward P/E multiples of 9.3× and 7×, respectively, versus ~26× for the Philadelphia Semiconductor Index.

 

Mathur stresses the importance of careful hedging even within the memory space.

 

“Holding both Samsung and SK Hynix gives you protection against execution missteps or project delays,” she said. “The worst thing in investing is to get the theme right but the stock wrong—picking a company that fails to benefit from the trend.”