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Micron and Sandisk continue rally as demand for memory expected to persist
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Shares of memory companies Micron and Sandisk jumped on Monday, continuing their extended runs, after Melius Research said demand could remain high through the end of the decade.
Key facts
- Sandisk gained 8.1% on Monday and is up over 3,000% in the past year, pushing its market cap past $157 billion
- Ben Reitzes, an analyst at Melius, upgraded Micron to a buy rating on Monday, noting it could gain another 41% over the next 12 months
- Micron is spending $24 billion on a major expansion of its NAND manufacturing facility in Singapore, while also building huge new U.S. chip fabs in New York and Idaho
- According to data from Counterpoint Research, the DRAM market has recorded 30% quarter-over-quarter growth for two consecutive periods, driven by rising memory prices
Summary
Memory companies are experiencing major gains from a global shortage for microchips to power artificial intelligence. Ben Reitzes, an analyst at Melius, upgraded Micron to a buy rating on Monday, noting it could gain another 41% over the next 12 months. " The market will eventually be willing to pay more for the unusual durability of the margin and demand profiles that AI makes possible," Reitzes wrote, adding that he expects Nvidia to invest more in memory soon. Micron is trading at a record, and it's market cap is approaching $600 billion.