It's not every day you find a legal lottery ticket with good odds and enticing artificial intelligence (AI)-fueled sequential growth wrapped in the same company. However, it's exactly what you will find in Netlist (NLST +0.00%), a growth stock that has massive 10-bagger potential.
Its Q4 2025 results showed the sequential growth that matches up with other memory stocks right before their big runs, and recent legal wins against Micron and Samsung can unlock long-term revenue growth that goes well beyond legal wins.
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The legal battles
Netlist has been embroiled in legal battles against various tech giants for more than a decade. It's still in the middle of a patent war against Alphabet that started back in 2009. The patent centers around memory technology that formed the foundation for high-performance servers, and that lawsuit was just the beginning.
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It has also tussled with SK Hynix, Samsung, and Micron in recent years. Netlist won its legal battle against SK Hynix in 2021 and received a $40 million payout for a license to its patents, but that legal reward was just the beginning.
Part of the agreement was that both companies signed a multiyear agreement. SK Hynix received access to Netlist's patent portfolio, and Netlist receives per-unit royalties on specific memory products.
Although the five-year agreement expired in April 2026, Netlist will likely announce that the agreement was extended when it reports earnings on May 12. SK Hynix used Netlist's patent portfolio when creating its memory chips, which have become hot amid the AI boom. The memory chipmaker can face massive legal and financial consequences if it continues to sell those chips without reaching a new deal with Netlist.
Netlist can secure similar licensing agreements with Micron, Samsung, and Alphabet if the court rules in its favor. Netlist added a Federal Circuit win earlier this year after rejecting Micron's patent challenge. Micron will be liable to pay $445 million if its challenges fall flat. Netlist also won two patent infringement cases against Samsung, showing leverage in legal battles.
It's not just a legal lottery ticket
Netlist has been winning in the courtroom, with the potential for more licensing deals in the future. If it is not satisfied with the terms, Netlist can seek an injunction that can restrict certain chip sales from corporations that were found guilty. At that point, chipmakers tend to reach an agreement quickly.
However, Netlist has tangible revenue growth that goes beyond legal wins. The company sells its own high-performance memory products, which contributed to 79% sequential revenue growth in Q4 2025. Its $75.7 million in Q4 2025 revenue also marked a 121% year-over-year improvement.
That quarter is an outlier, but it may become the new normal. Other memory chip providers like Micron and SanDisk have continued to build on initial sequential revenue gains and now report tremendous financial results that have ignited outsize gains.
Netlist may have just unlocked consistent, high sequential revenue growth, but Q1 2026 results will be the true test. The firm generated $112.9 million for the nine months ended Sept. 27, 2025, compared to $112.8 million for the nine months ended Sept. 28, 2024. Sales were flat for the entire year until Q4 2025. If that's a sign of more things to come and Netlist also gets some big legal wins, it can become a 10-bagger.
