The Overlooked Chip Stock Poised to Lead the AI Memory Boom

Silicon Motion Technology's NAND flash controllers are critical for the memory chip build-out.

It already has Sandisk, Micron, Samsung, and SK Hynix as customers.

Compelling growth rates, optimistic guidance, and an attractive long-term outlook suggest that the stock may continue to rally.

Memory chip stocks have won investors' attention thanks to the artificial intelligence (AI) boom. Micron Technology and Sandisk have produced tremendous gains over the past year, and investors are scouring the market for smaller memory chipmakers that can outpace the S&P 500 .

Silicon Motion Technology (NASDAQ: SIMO) may be a worthy candidate. This chip stock has almost tripled in value year-to-date, but its market cap is still under $10 billion and its valuation metrics are reasonable given its growth efforts. All of the growth is driven by fundamentals, and the company's guidance implies that revenue growth will continue to accelerate.

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Silicon Motion Technology supplies NAND flash controllers, which act as the brains behind solid-state storage devices and systems that use NAND flash memory. These NAND flash controllers are central parts of Sandisk's storage products, which have been flying off the shelves due to the AI boom .

The company also lists Micron, SK Hynix , and Samsung as customers. Each of these memory chipmakers has posted superb revenue growth and optimistic guidance in recent quarters, and Silicon Motion Technology has been a major beneficiary.