Memory 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 as the most certain direction within AI semiconductor hardware.

Both AI data centers and the robotics industry require high-performance memory, and demand for storage has not disappeared despite the recent stock price correction. Once market sentiment stabilizes, this sector will likely be the quickest to regain investor attention.

In terms of specific stock selection, we recommend prioritizing Micron Technology (MU) or SK Hynix, while avoiding SanDisk (SNDK), which has exhibited greater volatility and weaker recent performance. For aggressive investors who successfully bought the dip at lower levels a few days ago and hold light positions, it may still be reasonable today to choose between MU and SK Hynix for a second entry—but only through staggered position building.

Investors who previously bought MU at higher levels and remain underwater should avoid blindly adding to their positions during rebounds. Instead, they should gradually reduce exposure when the share price rallies, thereby limiting losses and managing risk, rather than waiting passively for a full recovery to breakeven.

II. Optical Modules Show Strengthening Momentum—Focus on LITE and TSEM

Last Friday, the optical module sector as a whole outperformed CPU-related stocks, primarily driven by a sharp rally in AXTI and renewed capital inflows.

However, the optical module space features complex technical pathways and a large number of individual stocks, and the market’s preferred leader can shift with each new cycle—making it more challenging to trade than memory or CPU segments. At this stage, if considering participation in optical modules, prioritize LITE or TSEM, which offer relatively stable fundamentals and price structures. Avoid chasing lesser-known names simply because they suddenly surge.

The underlying investment thesis for optical modules is far from exhausted; the current move may represent only 30% to 40% of the full potential rally, leaving room for further upside. However, near-term success requires careful stock selection and prudent position sizing—investors should not treat all names in the sector as equivalent opportunities.

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

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