AI infrastructure stocks to watch after the semiconductor market decline

The crowded trade has become a stress test for large-cap U.S. technology stocks, with heavy margin calls in AI and semiconductor stocks, a sharp decline in South Korean semiconductor giants and new questions about hyperscalers’ spending. At the same time, rising debt margins and cooling demand for AI sector bonds are changing the way investors think about risk and financing. In this article, we analyze how these pressures are connected, highlight three stocks from our AI and Semiconductor Leaders screen that appear to be positively exposed to this news shock, and explain why they still deserve to be on your watchlist.

Lambus (RMBS)

overview: Rambus is a semiconductor company that provides memory interface chips and security and interface IP that help move and protect data in AI servers, data centers, government systems, and automotive platforms, working closely with memory manufacturers, hyperscalers, and chip designers.

operation: Rambus generates approximately USD 721.2 million from semiconductors, with major geographic exposures to South Korea (USD 347.7 million), Singapore (USD 140.4 million), the United States (USD 119.9 million), and other markets (USD 113.1 million).

Market capitalization: 11 billion USD

Rambus sits at the core of AI infrastructure, offering DDR5 chipsets, PCIe, and HBM IP that enable hyperscalers to push more data to increasingly crowded servers. This could be a problem if other AI stocks face forced sales or funding crunches. Earnings growth is strong and margins are high. Recent offerings such as the 9,600 MT/s DDR5 server chipset and PCIe 7.0 switch IP ensure the company is always ready for the most demanding workloads. Its history of stock buybacks also suggests a willingness to return cash. At the same time, the heavy reliance on AI and data center cycles, the focus on DDR5 and the ongoing Department of Justice investigation means this story is not risk-free and may need a closer look before deciding how it fits on your watchlist.

Rambus sits at the intersection of AI plumbing and high profit margins, but the Justice Department investigation and focus on DDR5 leave big questions. Get the full story with 4 major rewards and 2 important warning signs

KLA (KLAC)

overview: KLA Corporation provides inspection, metrology, and yield management tools that chipmakers use to find defects, control processes, and improve yields in semiconductor fabs, making its equipment essential to manufacturing advanced AI and high-performance computing chips.

operation: KLA generates most of its approximately US$13.1 billion in revenue from semiconductor process control (approximately US$11.9 billion), with additional contributions from PCB and component inspection (approximately US$663 million) and specialty semiconductor processes (approximately US$566 million), serving chip and electronics manufacturers in Asia, North America, Europe, and Israel.

Market capitalization: $277.9 billion

KLA is at the heart of building AI chips. Because that tool helps big fabs squeeze more usable chips out of every wafer. This can be important as hyperscalers revisit spending plans and yield counts. Analysts currently expect earnings growth, high margins, and recurring service revenue to help smooth the cyclical sector, but the stock trades at a high P/E, continues to see insider selling, and heavy use of debt has boosted its already eye-catching ROE. How these strengths and pressure points are balanced is a key consideration for KLA for investors looking to separate quality from hype following the recent selloffs in AI and semiconductors.

KLA’s high margins and generous P/E suggest something more complex than a simple AI hype story, and the real tension lies in its balance sheet choices. As a result, two important rewards and two important warning signs could change your trade-off framework.

Lam Research (LRCX)

overview: Lam Research supplies the etch, deposition, and cleaning equipment chipmakers need to produce advanced semiconductors, from high-bandwidth memory to cutting-edge logic used in AI data centers, smartphones, and automobiles. Its tools sit deep in the production flow, making Lam an important partner for factories in the United States, Asia, and Europe.

operation: Lam Research generates approximately US$21.7 billion from semiconductor equipment and services, with major geographic exposures to China (US$8.0 billion), South Korea (US$4.3 billion), Taiwan (US$4.4 billion), Japan (US$2.3 billion), the United States (US$1.2 billion), Southeast Asia (US$1.1 billion), and Europe (US$500 million).

Market capitalization: USD 391.8 billion

Lam Research is at the center of the AI ​​wafer fabrication equipment story, providing tools that will help memory and logic manufacturers ultimately need to rebuild production capacity after today’s spending declines. However, the company’s reliance on a small number of large customers, large exposure to China, and high P/E ratio means that recent AI margin calls are paying dividends in both directions. Earnings growth of 44.1%, profit margins of around 30.9%, and very high ROE suggest that the core business is currently delivering results, although recent insider sales and financing from entirely external sources raise questions about its finances and governance. AI servers require much more DRAM and storage per box, so the real mystery is how Lam will participate if the next AI capex is different than the last, and how that will align with current valuation expectations.

Lam Research’s high margins, strong ROE, and generous P/E suggest that the story is deeper than a simple AI wafer fabrication business. The real twist lies within the whole Lamb Research story

The stocks in this article are just a starting point; our full screen of U.S. Large-Cap Technology Stocks (AI and Semiconductor Leaders) reveals 20 more large-cap technology companies with similarly compelling AI, semiconductor, and software narratives. Use Simply Wall St to identify and analyze the specific catalysts, funding profiles and business models that are most important to you, allowing you to focus on the opportunities with the highest conviction on this subject.

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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