Tech analyst Dan Ives has praise for the memory sector as demand continues to outpace supply.
Memory Stock Trade
The Roundhill Memory ETF (BATS:DRAM) and memory stocks like Micron Technology Inc (NASDAQ:MU) have seen strong interest and demand from investors in recent months. That trend is likely to continue, according to Yorkville Ives Senior Managing Director Dan Ives.
"There’s no way around it," Ives told CNBC.
The former Wedbush analyst said when it comes to the AI revolution, the ratio of demand to supply for memory is around 15 to 1.
Companies such as Apple are having to pay more for memory with demand and prices up, Ives added.
"Memory players, right now it’s their world and everyone else is paying rent."
Ives says there will continue to be ebbs and flows in the memory sector, but the multi-year cycle is going to continue to play out.
The analyst said that alternatives or Chinese players won’t change the current memory market, dominated by South Korea.
"Korea holds the cards when it comes to memory."
Asked about the potential of companies overordering or inventory changing, Ives says there are no worries about that now.
"It’s starting to play out from a bull case scenario."
Nvidia Earnings
During his interview, Ives was also asked about the upcoming NVIDIA Corp (NASDAQ:NVDA) quarterly earnings report, which could be a major catalyst for the AI trade.
Ives said investors are underestimating the size and scope of what Nvidia is doing.
"You’re almost giving them minimal credit for physical AI," Ives said.
The analyst said Nvidia’s earnings are incredibly important for the tech trade and could be a huge "planting the flag moment."
Known for his innings analogies of how far a trade or bull market is, Ives says it might not be the seventh inning of the AI trade, but instead could be only the bottom of the second inning.
Ives continues to praise Nvidia CEO Jensen Huang as the godfather of AI
"Betting against Jensen would be like those that bet against Tom Brady."
Nvidia reports second-quarter financial results on Wednesday, Aug. 26.
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