What Happened?
Shares of memory chips maker Micron (NYSE: MU) jumped 5.7% in the afternoon session after investor optimism grew amid an industry-wide memory supply shortage and soaring demand for its chips used in artificial intelligence (AI) applications.
The surge in demand was tied to data center operators expanding their AI capabilities. Micron's high-bandwidth memory (HBM) products were in high demand, with its chips designed into new GPUs from Nvidia and AMD. Major tech companies also signaled plans to increase their spending to support growing AI needs. This industry-wide memory supply shortage drove prices for dynamic random-access memory (DRAM) to their highest levels since 2019. Both Micron and a key competitor mentioned that their HBM products were sold out for 2026, highlighting the strong market conditions.
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What Is The Market Telling Us
Micron’s shares are extremely volatile and have had 42 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock gained 5.9% on the news that analysts at multiple firms, including Barclays, Stifel, and TD Cowen, raised their price targets on the stock, citing strong demand for its AI-related memory chips.
Barclays increased its price target to $450, while Stifel lifted its target to $360, and TD Cowen also set a new target of $450. The optimism was fueled by Micron's strong performance, as its recent earnings report showed that sales grew by more than 50% from the year-ago period, with its cloud memory division revenue nearly doubling due to the AI boom. Analysts pointed to a supply-constrained market for memory chips, especially high-bandwidth memory (HBM) used for AI, which was expected to last for several years. The company also announced a letter of intent to purchase a chip fabrication plant in Taiwan, a move seen as helping it meet the surging demand.
Micron is up 40% since the beginning of the year, and at $441.59 per share, has set a new 52-week high. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $5,410.
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