Shares of Micron and Sandisk surged on Monday, bolstered by Melius Research’s bullish outlook on memory demand, which is expected to remain robust through the end of the decade. The report highlights the significant role of High Bandwidth Memory (HBM) in powering AI data centers, with Micron’s stock up over 550% in the past year and Sandisk’s soaring more than 3,000%. Melius analyst Ben Reitzes upgraded Micron to a buy rating, projecting a potential 41% increase over the next year, while Bernstein’s Mark Newman echoed the sentiment, emphasizing strong earnings revisions driven by high memory prices.
This surge in memory stocks is a direct response to the ongoing global chip shortage, particularly for DRAM and NAND memory essential for AI applications. With prices skyrocketing—Gartner predicts a 17% rise in PC prices this year—buyers are increasingly entering long-term contracts to secure supply. Major players like Micron and SK Hynix are ramping up production capabilities, anticipating sustained demand.
For market professionals, the key takeaway is the growing importance of memory in the AI landscape, which could lead to continued price increases and further investment in memory production. As companies secure long-term supply agreements, the landscape for memory manufacturers is set for significant growth, making this sector one to watch closely.
Source: cnbc.com