2 Millionaire-Maker AI Stocks to Buy in February

Micron and Broadcom are positioned to benefit materially from surging AI hardware demand: Micron reported fiscal Q1 revenue up 57% YoY to $13.6 billion with shares up >300% year-over-year and trades at a forward P/E of ~12, while memory shortages are expected to persist through 2027 supporting reinvestment or buybacks. Broadcom posted Q4 revenue up 28% YoY to $18 billion and said AI semiconductor revenue rose ~74%, and it has strategic engagements including a pact with OpenAI to deploy accelerators; Broadcom trades at a forward P/E near 31. Goldman Sachs projects >$500 billion of AI-related capex by big tech in 2026, underpinning continued demand for AI accelerators, HBM memory and networking gear and favoring pick-and-shovel suppliers.

Analysis

Market structure: Hyperscalers and AI cloud providers (AWS, GCP, MSFT, OpenAI customers) are the clear winners short-to-medium term as DRAM/HBM and custom ASIC demand outstrips supply through 2027. Memory suppliers (MU, Samsung) and custom ASIC/AI-network vendors (AVGO, Broadcom’s customers) gain pricing power and margin tailwinds; commodity GPU incumbents face mix shifts but retain software-led capture. Expect elevated revenue growth (MU +~50% YoY reported) and persistent positive mix effects supporting EBITDA expansion for 4–12 quarters.

Risk assessment: Tail risks include a rapid capex response by DRAM fabs (new capacity online by mid-2026) collapsing prices (>30% downside to consensus DRAM ASPs), export controls on AI chips, or hyperscaler design shifts away from third-party suppliers. Immediate noise: next 2 earnings cycles; short-term (3–12 months) volatility around capex guides; long-term (2026–2027) depends on supply elasticity and hyperscaler budget discipline. Hidden dependency: revenue concentration to a handful of cloud customers and vendor-specific design wins.

Trade implications: Tactical overweight MU (value re-rate play) and AVGO (custom ASIC exposure) while protecting against a memory-price unwind. Use 6–18 month directional exposures via stock + options: MU LEAPs/call spreads to lever upside; AVGO covered-call overlay to monetize premium while holding 12-month view. Allocate 2–4% portfolio to long MU, 1–2% to AVGO and maintain 1–2% hedges (puts) against a market-wide tech drawdown.

Contrarian angles: Consensus underprices cycle risk — the same margin that attracts entrants and fab expansions can flip to a sharp bust (2018–2020 DRAM analogy). The market may also be underestimating Nvidia’s moat in software and ecosystem, making pair trades (long MU / short NVDA) profitable only if you hedge execution risk. Watch ASML/Applied/lam research capital shipments and hyperscaler capex guides as >10% sequential changes will flip valuations fast.

Key Decisions for Investors

• Establish a 2–3% long position in Micron (MU) using a mix of stock and 18-month LEAP call spreads (buy 2027 LEAP ~25–35% OTM, sell 2027 LEAP ~60–70% OTM) to capture upside from DRAM/HBM tightness; add to position on >15% pullback or if quarterly revenue beat >5% and guidance raised.
• Allocate 1–2% to Broadcom (AVGO) as a core 12-month holding to play custom-ASIC and AI-switch demand; finance with a covered-call program selling 6–9 month calls ~15–25% OTM to generate yield while retaining upside to positive contract disclosures.
• Implement a pair trade: long MU (2%) / short NVDA (1% notional) for 3–6 months to express rotation into memory/custom silicon valuation re-rating; cap downside with a 3-month SPX or NVDA put hedge sized to limit drawdown to ~5% portfolio impact.
• Hedge portfolio AI/capex concentration: if semiconductor exposure >5% of NAV, purchase 3-month ATM put spreads on SOXX or 5–7% notional NVDA puts as tail protection; reduce hedge if hyperscaler capex guidance stays up >10% YoY for two consecutive quarters.