Micron, the Boise, Idaho-based memory chip maker, has captured Wall Street’s attention. Its market valuation briefly surpassed that of Meta and Tesla, reaching nearly $1.27 trillion. This surge reflects growing confidence in the company’s ability to meet the rising demand for memory chips driven by AI technologies. Micron’s stock has risen over 236% in the past month, closing at $1,132 a share. This dramatic increase marks a significant shift from its years-long struggle to stay above $100 a share.
The AI data center boom has created a shortage of system memory chips, particularly High-Bandwidth Memory (HBM), which Micron produces. Major AI system makers like Nvidia, as well as hyperscalers such as Microsoft, Amazon AWS, Google, Meta, and Oracle, are buying large quantities of memory. This has led to a competitive hoarding of memory by other manufacturers, including PC makers like Dell and HP. The scarcity, dubbed RAMageddon, is expected to persist into 2027, driving up prices for consumer electronics like Apple products and Xbox consoles.
Micron’s recent financial performance underscores its position in the market. The company reported blockbuster third-quarter earnings, with revenue quadrupling to $41.45 billion and profits surging from $1.88 billion to $28.2 billion. Micron also forecasted fourth-quarter revenue between $49 billion and $51 billion. Analysts, eager to find public AI-related companies that may perform as well as Nvidia, have become increasingly optimistic about Micron’s prospects. However, the company faces challenges, including the lengthy and expensive process of expanding manufacturing capacity, which could lead to overcapacity and price drops if demand wanes.
Source: techcrunch
