Memory storage remains the most certain segment within AI hardware, and optical modules are showing strength.

First, from a sector performance perspective, I continue to view memory storage as the most certain direction within AI semiconductor hardware.

Both AI data centers and the robotics industry require high-performance memory storage, and demand has not disappeared despite recent stock price corrections. Once market sentiment stabilizes, this segment will likely regain investor attention most easily.

In terms of specific stock selection, we recommend prioritizing Micron Technology (MU) or SK Hynix, while avoiding Western Digital (SNDK), which has exhibited higher volatility and weaker recent performance. For aggressive investors who successfully bought at lower levels a few days ago and maintain light positions, it is still acceptable today to choose between MU and SK Hynix for a second entry—but only through staged position-building.

For investors who previously bought MU at high levels and remain underwater, we do not recommend blindly adding to positions during rebounds. Instead, use price rallies to gradually reduce exposure, thereby limiting losses and managing risk—rather than waiting indefinitely to break even.

Second, optical modules are showing renewed strength; prioritize Lumentum (LITE) and Tower Semiconductor (TSEM).

Last Friday, the optical module sector as a whole outperformed CPUs, primarily driven by AXTI’s sharp rally and capital rotation back into the group.

However, the optical module segment features complex technical pathways and a large number of individual stocks, with leadership often shifting across different market cycles—making it more challenging to trade compared to memory and CPU sectors. At this stage, if participating in optical modules, prioritize fundamentally sound and structurally stable names like LITE or TSEM. Avoid chasing after sudden spikes in lesser-known, lagging stocks.

The underlying investment thesis for optical modules remains intact; the current move may represent only 30% to 40% of the full cycle, leaving room for further upside. However, near-term participation requires careful stock selection and prudent position sizing—investors should not treat all stocks in the sector as equally attractive opportunities.

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$Micron Technology (MU.US)$ $SK hynix (SKHY.US)$ $Lumentum (LITE.US)$ $Tower Semiconductor (TSEM.US)$

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