A Tax-Free Savings Account (TFSA) is an ideal instrument to generate wealth. The best way to make optimum use of its tax benefit is to invest in high-growth stocks. When you speak of growth, you have to invest in stocks that are futuristic, whose businesses you can see being relevant for years to come.
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The sector to invest in through a TFSA
The artificial intelligence (AI) boom that began in 2023 and peaked in 2024 is now facing cautious growth in 2025. Analysts fear that 2026 could be the year when the AI bubble may burst. A bubble doesn’t mean that AI is not the future. It only means that investors are pricing in several years of future growth today. The shares are overvalued and need a strong reason to justify that valuation or face a correction.
NVIDIA, the poster child of AI, which saw its revenue jump threefold, has seen its share price growth stagnate in 2025. Microsoft, among the early investors in ChatGPT creator OpenAI, is worried about the AI return on investment (ROI) to justify the billions of dollars of capital. Has the AI growth slowed, or is there more room for growth?
AI is like a relay race where one supplier will facilitate the other to harness the power of AI. Companies like Nvidia and Microsoft have completed the first segment of the AI relay race by providing graphics cards and building large language models (LLMs). They have now passed on the baton to memory chips.
The only stock to hold in TFSA for life
The thing with memory chips is that you need them in different shapes, sizes, and performance levels to perform any digital task. Personal computers, mobile phones, Internet of Things (IoT), cloud computing, and autonomous cars – each revolution creates a new segment for memory chip demand. There are two major memory chips: dynamic random access memory (DRAM), which processes large data sets, and NAND Flash, which accesses data faster.
The AI revolution has created an acute shortage of high-bandwidth memory (HBM) chips used in AI data centres. To give you a sense of how acute the shortage is, US-based Micron Technology (TSX:MU) said that it will stop making memory chips for consumers and divert that capacity to HBM. All this happened in the fourth quarter of 2025.
Micron is the third-largest memory chip maker after South Korea’s Samsung and SK Hynix. The three command more than 80% market share. Micron is able to meet two-thirds of the demand. This shortage has shot up DRAM prices by 600% in the last quarter, encouraging Samsung to decline long-term DRAM contracts and instead sell at higher spot prices.
This is not the first time a memory chip shortage has occurred. There are growth cycles, like a mobile and PC upgrade cycle, which see demand overtake supply. A memory chip cycle generally lasts three to four years, as that is the time it takes to build a new fabrication facility. Until then, the three suppliers enjoy higher prices for their limited capacity. The cycle ends when new production comes online.
Micron stock has surged 200–300% in each of these cycles. However, the AI supply shortage is different.
Why is Micron stock a buy even at its high?
Micron stock has already surged almost 350% in the last 12 months, and the supply shortage is showing no signs of slowing. The company expects the shortage to last throughout 2026 and beyond. It is building a new fab in Singapore for US$24 billion, and acquiring Powerchip’s P5 site in Taiwan for US$1.8 billion in cash to increase DRAM production capacity.
Even if the AI cycle fades, memory chipmakers will have pent-up demand from PC and mobile memory chips, which are expected to face a supply shortage in 2026, as per a report from IDC. Consider Micron’s 300% rally as the initial rally of Nvidia in November 2022, when the AI boom began. Even Nvidia stock jumped 300% in the first year, and cautious investors avoided the stock only to miss the next 300% rally in the second year.
