Micron rides memory chip boom to emerge as Wall Street’s latest AI favourite

The rally has been fuelled by strong demand for memory chips used in AI data centres, which require significantly more DRAM, NAND and HBM than traditional PCs and smartphones.US memory chipmaker Micron has emerged as one of Wall Street’s biggest beneficiaries of the artificial intelligence boom, with investors betting the company could replicate Nvidia’s success as soaring demand for memory chips reshapes the semiconductor industry, according to TechCrunch.The Idaho-based company briefly surpassed the market capitalisation of Meta and Tesla during Thursday’s trading before ending the week just below both companies.

Micron closed Friday with a market value of nearly $1.27 trillion, compared with Meta’s $1.39 trillion and Tesla’s $1.42 trillion.Micron’s stock has surged more than 236 per cent over the past month, closing Friday at $1,132 a share after trading below $100 for years until mid-2025.Unprecedented demandThe rally has been driven by unprecedented demand for memory chips used in AI data centres.

Unlike traditional PCs or smartphones, AI servers require significantly more DRAM, NAND, and High-Bandwidth Memory (HBM), all of which Micron manufactures.Technology companies, including Nvidia, Microsoft, Amazon Web Services, Google, Meta and Oracle, have been buying large quantities of memory chips to support AI infrastructure, creating a supply shortage that has also prompted other electronics manufacturers to secure inventory.The supply crunch, dubbed “RAMageddon”, is expected to persist through 2027 and has already pushed up the prices of consumer electronics, including Apple devices and gaming consoles.The favourable market conditions were reflected in Micron’s latest quarterly results.

The company reported third-quarter revenue of $41.45 billion, nearly four times higher than a year earlier, while net profit jumped to $28.2 billion from $1.88 billion.

It also forecast fourth-quarter revenue of $49 billion to $51 billion.Micron said it has signed 16 long-term strategic customer agreements spanning the data centre, consumer and automotive segments.

These include supply agreements with major AI customers such as Nvidia and Anthropic, which the company said would provide greater revenue visibility and reduce the cyclicality typically associated with the memory industry.Memory manufacturers have historically faced boom-and-bust cycles, with heavy investment in production capacity often leading to oversupply once demand slows.

However, analysts believe the current AI-driven demand cycle could prove more durable.William Blair analyst Sebastien Naji said demand growth continues to outpace the industry’s ability to add new manufacturing capacity, while Micron’s expanding portfolio of long-term supply agreements could support more sustainable earnings growth.Whether the company can avoid the traditional downturns that have characterised the memory chip industry remains uncertain.

However, Micron’s rapid rise has made it one of the strongest performers in the AI-driven semiconductor rally and one of Wall Street’s most closely watched technology stocks.