Bank of America has highlighted a top pick in the semiconductor industry, driven by what it describes as 'explosive' demand for AI memory chips. The call comes as global tech giants accelerate investment in data centres and AI infrastructure, boosting the outlook for memory manufacturers.
The FTSE 100 edged 0.3% higher on Friday, closing at 8,214.56, with technology and semiconductor-related stocks among the gainers. The broader FTSE 250 added 0.2% to 20,987.10. Analysts noted that UK-listed firms with exposure to the AI chip supply chain are attracting renewed attention from institutional investors.
BofA's recommendation focuses on a company it believes is well-positioned to capitalise on the shift toward high-bandwidth memory (HBM) used in AI processors. The bank's analysts pointed to rising orders from hyperscale cloud providers and a tightening supply-demand balance for advanced memory chips as key catalysts.
For UK pension holders and retail investors, the development underscores the growing influence of AI-related demand on broader market performance. While direct exposure to pure-play memory makers is limited on the London Stock Exchange, several UK-listed technology and industrial firms supply components or services to the semiconductor ecosystem.
Sector analysts caution that while the AI memory cycle looks robust, investors should remain mindful of potential volatility tied to geopolitical tensions and export controls affecting the chip industry. The BofA note adds to a growing chorus of bullish calls on AI infrastructure plays this year.