Why Have Memory Chip Makers Surged?

Jacob Harper  |

While Tech as a whole has been an undeniably hot sector for investors over the past year, within tech there’s been one specific industry that has shown massive gains: memory chip makers. Six separate companies can claim to devote the majority of their resources to the design and manufacture of chips designed to store information, and as a monolith have shown impressive returns. Four out of the six have returned at least fifty percent, with one – last year’s largest tech S&P 500 gainer Micron Technologies ($MU) – tripling in value.    

The cause of this surge can partly be traced to the tech sector’s current, and possibly permanent, infatuation with Big Data. That is, with the advent of more and more sophisticated data collection, companies are needing more and more hardware to process, catalogue, and ultimately analyze all the data coming into their servers.

Other areas of high growth for memory chip makers are mobile, cloud, and security. In short, as our lives get more electronic (thus creating more information, thus creating a need for more places to put information) memory chip makers are surging, with some like Netlist Inc. (NLST) gaining an amazing 75 percent in the first two weeks of 2014 alone.

Here’s a closer look at the six plays that comprise the memory chip maker industry:

Market Cap: $868.25 million

Price: $14.77

P/E Ratio: N/A (forward P/E is 10.81)

Performance (Year): +14.76

 

Market Cap: $359.29 million

Price: $12.42

P/E Ratio: 10.82

Performance (Year):  +35.29

 

Market Cap: $29.45 million

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Price: $1.06

P/E Ratio: N/A

Performance (Year):  +55.88

 

Market Cap: $24.19 billion

Price: $23.13

P/E Ratio: 15.22

Performance (Year): +201.56

 

Market Cap: $39.42 million

Price: $1.30

P/E Ratio: N/A

Performance (Year):  +64.56

 

Market Cap: $965.32 million

Price: $8.57

P/E Ratio: N/A (forward P/E is 98.51)

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