While chip giants such as Nvidia, SanDisk, Micron and Intel continue to dominate investor attention, a little-known microcap stock Netlist has delivered a much bigger rally this year.
Shares of Netlist have surged more than fivefold in 2026, significantly outperforming some of the biggest names in the semiconductor industry. The rally has been driven by improving hardware sales as well as a series of legal victories that could potentially transform the company’s finances.
Netlist reported revenue of $109.8 million in the second quarter, up 163% from a year earlier. The company also swung to a net profit of $1.4 million from a $6.1 million loss in the same quarter last year.
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Netlist primarily generates revenue by reselling memory hardware, but it is also developing Compute Express Link (CXL) solutions, which could become an important growth driver as demand for AI infrastructure rises. The company is already generating revenue from its DDR5 memory controllers.
A major catalyst for Netlist has been its five-year agreement with Samsung covering the use of its patent portfolio. Under the deal, Samsung will pay Netlist $239 million upfront, along with royalties of up to $32.9 million per quarter through 2031.
Netlist also has the right to purchase up to $300 million worth of Samsung DRAM and NAND products annually, which it can use or resell.
The agreement is particularly significant because Netlist has spent more than a decade fighting major technology companies over alleged patent infringements involving memory technologies used in AI infrastructure.
The Samsung settlement could also strengthen Netlist’s negotiating position with other chipmakers. Shortly after announcing the agreement, the company sought exclusion and cease-and-desist orders against Micron, Supermicro, Hewlett Packard Enterprise and Lenovo over alleged patent infringements.
Netlist has previously secured a $445 million patent-infringement award against Micron, although the case remains under appeal. A successful settlement with Micron could potentially open the door to further royalty agreements with other technology giants, including Nvidia and Broadcom, which Netlist has also named in patent-related proceedings.
However, the stock’s spectacular run also comes with significant risks. Much of the investment case depends on future legal outcomes, while microcap stocks can experience sharp swings in either direction.
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For now, Netlist’s combination of growing hardware revenue, potential royalty income and legal victories has made it one of the semiconductor market’s most unusual outperformers in 2026.
Meanwhile, the chip stock trade continues to see high volatility. The big names were trading lower pre-market on Friday, after the rally seen on Thursday.
Nvidia shares ended Thursday at $227.98, gaining 8.74%. However, the stock was down 0.56% in pre-market trading at $226.70 on Friday. Micron Technology shares closed at $935.39, down 0.32%, and slipped another 1.98% in pre-market trading to $916.87. Intel also joined the pre-market decline. Its shares ended Thursday at $92.09, up 4.36%, but were trading 2.27% lower at $90 before the opening bell.
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