Are These Volatile AI Stocks Worth Buying Now?

The growing adoption of artificial intelligence is driving tremendous growth for the semiconductor industry

But demand for chips can be cyclical, which can lead to volatility for many of these stocks

It's important to understand that wild swings in prices don't tell you anything the long-term direction of the

Volatility can be a long-term investor's friend, viding the opportunity to buy competitively positioned companies at attractive valuations

These high-growth es are meeting the growing demand for AI infrastructure in data centers and other ducts

Here's why they may, or may not be, smart buys right now

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Micron nology Investors have a lot of choices to fit off the investment in AI infrastructure

There is tremendous demand for everything from chips, networking, and liquid-cooled servers

But for Micron nology, the need for more high-bandwidth memory and solid-state storage (SSD) to enable faster data cessing and retrieval is a huge opportunity

The memory market is competitive, which historically led Wall Street to focus on the cyclical swings in selling prices and supply that create volatility in Micron's financials

Micron could easily repeat that performance in the coming years

Overall, Micron's sales to data centers more than doubled over the year-ago quarter

However, the stock is trading at 16 times this year's earnings estimate and just 10 times next year's earnings

These modest earnings multiples indicate that Wall Street is underestimating the sustainability of Micron's growth

It's possible that Micron's revenue over the next several years could be smoother than the lumpy results in recent years

The company is also gaining momentum with its SSD, gaining on competitors to become the No. 2 player in the market

As more advanced AI workloads kick in, data centers will need memory nology for faster data cessing speeds and better energy efficiency to control computing costs

Micron's growth suggests that it is meeting this need

Its relatively modest P/E multiple doesn't reflect this possibility, making the stock a compelling long-term investment

I would consider buying s

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Arm Holdings Teaching computer models to think more humans will continue to require substantial investment in greater cessing power

Arm is a leader in designing and licensing central cessing units (CPUs) to other chip companies and duct manufacturers

In fact, you're bably reading this on a device powered by an Arm-based cessor

Its market in cloud computing, automotive, and other has been steadily increasing every year

Leading companies, including Nvidia, Amazon, Alphabet's Google, and Microsoft, are using Arm-based chips

Nvidia's Grace Blackwell CPU for data centers is an Arm-based design, while Amazon, Google, and Microsoft are using its chip nology to power cloud services for their customers

This is pointing to excellent growth spects for Arm Holdings

The reason the stock has been so volatile over the last year can be attributed to its high valuation

Arm's lucrative of designing chips and collecting royalties on every chip shipped using its nology is well reflected in the stock right now, which is trading at 88 times this year's earnings estimate

For example, Nvidia, Advanced Micro Devices, and Taiwan Semiconductor Manufacturing are each growing earnings at the same rate, or faster, than Arm but trade at much lower earnings multiples

All of these stocks, including Micron, offer investors a more attractive growth-to-value file, and therefore offer a better opportunity for market-beating returns

I would pass on Arm stock for now.