Micron Technology shares rose more than 13% this Thursday (18), around 3:35 pm Brasília time, after a forecast of higher-than-expected profits, due to the global shortage of memory chips amid strong demand from artificial intelligence data centers.
Memory shortages across industries — from smartphones to large data centers — have driven up prices, helping Micron forecast second-quarter adjusted profit at nearly double Wall Street’s expectations.
“Constrained memory supply caused by immense AI infrastructure demand is driving market prices for Micron and its memory chip peers,” Morningstar analysts wrote in a note.
“The current cyclical recovery is generating enormous value for shareholders.”
Micron is one of the three main suppliers of high-bandwidth memory chips (HBM), alongside South Korean Samsung and SK Hynix. Chips are essential for training and deploying generative AI models.
Micron’s share price has risen more than 160% this year, while shares of South Korean-listed Samsung and SK Hynix have more than doubled and tripled in value, respectively.
In a conference call with investors on Wednesday, Micron Chief Executive Sanjay Mehrotra said he expects memory chip markets to remain bullish beyond 2026.
Memory is a highly cyclical sector, characterized by extreme crashes and booms with volatile price levels.
While analysts have differing opinions on how long the current expansion, commonly referred to as the “supercycle,” could last, Wall Street unanimously agrees that the supply shortage could last beyond Micron’s estimates, despite efforts to increase capacity.
The memory chip maker has been retooling its production facilities to prioritize growing demand from AI data centers. Additionally, it has also increased its capital spending plans for 2026 to $20 billion as it increases investments to meet growing demand.
While Morningstar analysts expect robust prices to ease over the long term, they see supply shortages persisting through 2027. JP Morgan analysts also expect supply shortages to persist through 2027.
