When investors look for companies benefiting from the ongoing artificial intelligence boom, they are likely to come across well-known, multibillion-dollar names such as Nvidia, SanDisk, Micron, Intel, SK Hynix, TSMC and Samsung. These companies have attracted global investor interest following their massive share price rallies in 2026.
However, one lesser-known stock, Netlist, has quietly outperformed many of these frontrunners in the AI trade. With a market capitalisation of less than $2.5 billion, the stock has surged around 650% in less than eight months of 2026.
California-based Netlist develops advanced memory and storage technologies, including server memory and high-bandwidth memory solutions used in AI computing. The rally has been supported by multiple positive developments, including a deal with Samsung and strong second-quarter performance.
The company generates revenue through the design, production, and sale of specialized memory modules and subsystems that address performance and storage requirements in data-intensive computing environments.
While the latest rally may have surprised some investors looking at the stock’s recent numbers, Netlist shareholders have witnessed similar sharp gains in the past. The shares ended 2021 with a massive 969% jump, while the stock had previously surged 1,675% in 2009, when global markets were gradually recovering from the financial crisis.
However, there is a catch. Despite delivering massive returns during these rallies, Netlist has struggled to sustain its gains over the long term, making it highly volatile and vulnerable to market swings. The stock remains around 35% below its 2021 peak of $10.20, despite its massive rally so far this year.
Samsung deal fuels rally
One of the major reasons behind Netlist’s rally was its five-year licensing and supply agreement with Samsung Electronics, which ended years of legal disputes between the two companies.
Under the deal, Samsung will gain access to Netlist’s patent portfolio, including technologies related to server memory modules and high-bandwidth memory used in AI servers and high-performance computing, while also supplying Netlist with DRAM and NAND flash memory. Samsung will also purchase 10 million Netlist shares under the memory product supply agreement.
The agreement comes after years of patent litigation between the companies and follows a recent US trade investigation into Samsung memory chips following a complaint by Netlist.
The deal is particularly significant amid rapidly growing demand for high-performance memory chips as technology companies expand their AI data centres, benefiting major memory-chip makers such as Samsung, SK Hynix and Micron Technology.
Netlist returns to profit
Netlist reported a sharp improvement in its financial performance during the second quarter of 2026. Net sales surged 163% year-on-year to $109.8 million, while gross profit jumped more than 15-fold to $22.9 million.
The company also returned to profitability, reporting net income of $1.4 million compared with a net loss of $6.1 million in the same quarter last year.
For the first six months of 2026, Netlist’s sales more than tripled to $214.7 million from $70.7 million in the year-ago period. Gross profit surged to $45.3 million from just $2.7 million, while the company reported net income of $10 million, compared with a net loss of $15.6 million a year earlier, as per the company’s earnings’ release.
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