Missed Nvidia in 2009? This Rare Signal Is Flashing Again.\u00a0In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia.\u00a0For the first time in years, that same “Total Conviction” signal is flashing for a company 1\/100th the size of Nvidia.\u00a0Continue \u00bb<\/a> <\/p>\n However, with HBM, GPUs, and other high-performance chips all being manufactured using extreme ultraviolet (EUV) lithography and only one company in the world, ASML, able to make the massive and complex machines required, there is a limit to how much chipmaking capacity can be added in a single year. On top of that, producing HBM requires upwards of three times the wafer capacity as ordinary DRAM, which further limits capacity increases. <\/p>\n With the big three DRAM makers focusing their efforts and capacities on HBM, ordinary DRAM is also in short supply. As a result, prices for all types of DRAM have skyrocketed. SK Hynix’s CEO recently said that 2027 will bring the worst memory crunch in the industry’s history and predicted that demand could outpace supply past 2030. This dynamic has been a huge boon to both SK Hynix and Micron, lifting their revenues, gross margins,<\/a> and profits. Conditions could be even more favorable for them next year. <\/p>\n But for investors, the question is which stock looks like the better buy now. <\/p>\n SK Hynix: The market leader <\/p>\n SK Hynix is arguably the memory market leader. While Samsung has the highest market share for both DRAM and NAND, SK Hynix was the first to develop HBM, and it has a close partnership with Nvidia. It’s also the GPU leader’s main HBM supply partner. This relationship has helped it become the market share leader in what is perhaps the most important segment of the market, where it holds a nearly 60% share. <\/p>\n Story Continues <\/p>\n Overall, SK Hynix derives close to 80% of its revenue from DRAM and most of the rest from NAND (flash memory). Somewhat ironically, despite increasing HBM capacity and rising prices, standard DRAM server prices rose even more dramatically, so that segment made up a larger percentage of its DRAM revenue in Q1 than it did in the prior-year period. Overall, the company’s revenue surged nearly 200% in Q1, while its gross margin went from 57% to 79%. That led to a nearly 400% surge in profit. <\/p>\n SK Hynix has started to lock in longer-term sales agreements for the first time, getting between three- and five-year agreements with no price caps, up-front payments from customers, and price floors. Meanwhile, it’s looking to double its wafer capacity by 2030. <\/p>\n Micron: Booming growth <\/p>\n Similar to SK Hynix, Micron derived about 76% of its revenue from DRAM last quarter, with NAND making up the rest. Last quarter, its revenue more than quadrupled year over year, and gross margin jumped from 37.7% to 84.6%. <\/p>\n It, too, has started to sign long-term agreements, which it says now cover about 40% of its revenue. One area where it diverges from SK Hynix, though, is that its contracts have price caps, along with some take-or-pay provisions. Micron is also investing aggressively to increase its production capacity. <\/p>\n SK Hynix is the HBM market leader, and its longer-term contracts without price caps could give it more upside if the up phase of this DRAM supercycle persists. Its American depositary receipts (ADRs) currently trade at a forward P\/E of under 6, similar to Micron’s valuation. <\/p>\n The knock on the stock, though, is that its ADRs trade at a big premium valuation to its stock in South Korea. This situation has been leading to some crazy price movements. I think SK Hynix is the better company, and its ADRs trade at a similar valuation to Micron, making it the better long-term buy. However, SK Hynix’s trading dynamic is something worth considering when weighing whether to purchase the stock. <\/p>\n Should you buy stock in Micron Technology right now? <\/p>\n Before you buy stock in\u00a0Micron Technology, consider this: <\/p>\n The Motley Fool\u00a0Stock Advisor\u00a0analyst team just identified what they believe are the\u00a010 best stocks<\/a>\u00a0for investors to buy now\u2026 and\u00a0Micron Technology\u00a0wasn’t one of them.\u00a0The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. <\/p>\n Consider when\u00a0Netflix\u00a0made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $369,577!*\u00a0Or\u00a0when\u00a0Nvidia\u00a0made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $1,301,557!* <\/p>\n That performance is why people listen. 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