Tech companies desperately need memory chips right now. A massive global shortage is forcing giant corporations to scramble for limited supplies. Because of this sudden panic, Micron has quickly become the ultimate favorite on Wall Street. The chipmaker is watching its value absolutely explode during an ongoing memory rally.
The stock jumped yet again on Monday morning, completely ignoring a gloomy overall stock market. While rising energy prices and fresh concerns over fighting between the United States and Iran pushed the broader market down, Micron pushed ahead. Shares of Micron leaped exactly 9 percent in early morning trading, while the S&P 500 index sat completely flat.
A quick look at the stock board showed very little green outside of the chip and energy sectors. Energy climbed strictly because global oil prices spiked. Meanwhile, other technology companies enjoyed the morning ride. Intel stock jumped more than 6 percent, and Qualcomm soared over 12 percent before traders eventually sold off some of those early profits.
Micron currently enjoys an incredible winning streak. The company watched its shares close in the green during 11 of the last 15 trading sessions. If you look back just a few weeks, the growth looks even more shocking. Since the end of March, the value of Micron shares has more than doubled.
A deep belief in artificial intelligence drives this seemingly unstoppable trend. Analysts look at the soaring demand for smart software and pair it with the severe memory chip shortage. Jay Goldberg, an analyst at Seaport Research Partners, noted on Wednesday that surging demand for artificial intelligence hardware will dramatically boost revenue for these semiconductor firms. He predicts massive windfall gains across the entire sector if technology adoption outpaces current forecasts.
Wall Street experts now openly talk about a massive supercycle. They predict this incredible boom will easily last well beyond the end of next year. To meet this crushing demand, chipmakers currently negotiate massive new deals with their biggest customers. They want guaranteed money upfront to build new factories, boost their manufacturing capacity, and finally increase the global chip supply.
Of course, this boom creates major headaches for the buyers. Tech companies now face significantly higher input costs because of the shortages. During their quarterly earnings calls last month, multiple executives from the big four hyperscale cloud providers complained openly about the situation. They highlighted the rising cost of memory chips as a massive pressure point hitting their supply chains right now.
Because buyers have no choice but to pay up, profit expectations in the chipmaking sector grow wider every single week. Financial data firm FactSet reports that companies like Micron, SanDisk, and Broadcom expect to make an absolute fortune. These companies now project gross profit margins sitting well above 75 percent for the entire year of 2026.
This potential supercycle completely detaches the chipmaking sector from the rest of the global economy. Last Friday, major equity indices sat mostly flat as normal businesses struggled to grow. At the exact same time, the Roundhill memory ETF, which tracks the global DRAM market, skyrocketed about 13 percent.
Everyday retail investors also want a piece of the action. People who trade stocks from their phones talk constantly about the memory chip boom. A recent May 7 commentary from JPMorgan analyst Arun Jain and his colleagues pointed this out directly. They noted that everyday traders turned Micron into one of the most hyped stocks across all social media platforms.
This financial frenzy stretches far beyond the United States. Chipmakers in South Korea actually produce the vast majority of the world’s memory components, and they are riding especially high right now. FactSet reported that SK Hynix stock rose more than 11 percent on Monday. Its main rival, Samsung Electronics, also enjoyed a massive day, rising more than 6 percent during the morning trading session.
