UBS analyst Timothy Arcuri highlighted three "stealth" AI stocks that deserve investors' attention. According to him, in addition to bigtechs and obvious AI beneficiaries like Nvidia, whose shares already look overheated, the market is missing out on less popular companies that could also benefit from the next wave of AI growth. For example, the success of market leaders encourages the development of more niche players, especially in the microchip hardware segment, UBS explained.

"We're seeing the dual effects of surging demand and Nvidia's shift to more advanced technology all of which will gradually flow through the supply chain," emphasized the UBS analyst quoted by Business Insider.

Whose shares were included in the UBS list

- Memory maker Micron Technology. Despite a weak chip demand outlook that caused the stock to sag in December 2024, its performance this year has been strong. The analyst believes that as Micron transitions from a cyclical business model to a more sustainable structure, the market will begin to re-evaluate its potential.

Since the beginning of the year the market value of Micron has soared by 160%. 93% of analysts tracking the dynamics of the company's shares advise investors to buy them (Buy and Overweight estimates). However, the Wall Street consensus target price of $214 is already below the current $218 per paper, according to MarketWatch.

- Semiconductor equipment maker Lam Research. The analyst noted that this is his favorite stock in the semiconductor equipment sector. He said the driver for Lam's stock price will be the growing demand for computing power from hyperscale companies developing AI. "If you do some calculations as to how much computing power will have to be added, and how much memory will have to be added, and how much it will cost to build that infrastructure, and how much hardware will have to be bought - you get a really, really big figure," the UBS expert suggested.

Since the beginning of the year, Lam Research has gained 115% and the average Wall Street target price implies a 3.5% increase from the previous trading close. 24 out of 34 analysts who have assigned ratings to the company's shares advise them to buy (Buy and Overweight). Another nine are neutral with a Hold rating and only one suggests selling (Underweight).

- Teradyne is a manufacturer of automated test equipment. It is the smallest company in Arcuri's list by market capitalization - $23.4 billion. According to the analyst, the main driver of Teradyne's stock price growth will be the accelerating development of artificial intelligence infrastructure - the company makes the equipment needed for chip testing, without which semiconductor manufacturing cannot scale. "There are only two companies in the world that make testers for such tasks: one is Japan's Advantest and the other is the US-based Teradyne of Boston," Arcuri emphasized.

Teradyne's stock is up 17% in 2025. Opinions on Wall Street about this company are divided: 10 analysts out of 20 advise to buy its shares, six analysts advise to hold, and four analysts advise to sell. The consensus target price of $143.6 is slightly below the closing price of the previous trade ($147.5).

This article was AI-translated and verified by a human editor

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