In the latest eye-opener of the booming AI arms race, American semiconductor maker
Micron Technology topped $1 trillion in market value last Tuesday, joining Samsung, the
world’s top memory chipmaker, as the second company with the 1T distinction. The
stunning rally cemented the U.S.’s largest memory chipmaker as one of the standout
winners of the AI boom.
Once brokerage firm UBS increased its price target on the stock from $535 to $1,625—the
highest of the 46 brokerages covering the company—Micron shares skyrocketed, having
increased as much as 19.3% earlier in the session, according to LSEG data.
The milestone underscores memory chips’ central role in AI infrastructure but also reflects
a broader market shift in which investors are looking for companies that can benefit from
Big Tech’s massive spending plans after initially overcrowding makers of graphic
processors.
“The need for pure memory has increased rapidly over very short periods of time, and
clearly, Micron sits at the center of it,” said Art Hogan, chief market strategist at B. Riley
Wealth.
“Today’s crossing of the $1 trillion mark for Micron is just an exclamation point on the story
of the massive amount of demand needed to run data centers in this AI revolution.”
Samsung Electronics of South Korea, the world’s top chipmaker, already hit the 1T mark,
while SK Hynix is also closing in. But Micron’s ascent gives the U.S. a strong contender in
the memory chip race, which has been dominated by Asia thus far.
While Nvidia makes powerful processors used to train and run AI models, Micron produces
the chips used to store and move data.
Samsung shares surged last week as well, after they averted a strike with its South Korean
union, though a union representing the conglomerates electronic workers said it has asked
a South Korean court to block a vote on the agreement. Any work shortage at the world’s
largest chip maker could spurn price hikes at a time when the AI boom is already causing
shortages.
Shares of Micron, long considered one of the semiconductor industry’s most cyclical
names, increased eight-fold in the last 12 months, thanks to strong earnings and supply
chain constraints, thus fueling their pricing power.
Prices have been driven up with the rise in demand for advanced memory storage and
companies committing to longer-term data center investments, as the race toward
artificial general intelligence continues.
Micron has said its entire 2026 high-bandwidth memory (HBM) chip supply is already sold
out, a sign of how far demand is outstripping capacity. Its next-generation HBM4 products
are now in production.
Their entry into the exclusive 1T club signals a significant rebound from the post-pandemic
era, when memory chipmakers struggled with a supply glut as demand for smartphones
and personal computers weakened due to the sudden inflationary hike.
Micron has emerged as one of the biggest market favorites in Quarter 1 of this year, as they
trade at 8.42 times expected earnings over the next 12 months, compared with 22.15 for
the benchmark S&P 500 index and 26.23 for the Nasdaq.
Additionally, American semiconductor maker Sandisk has emerged as another major
winner of the tech boom, seeing it’s shares increase 4,000% over the past 12 months, and
about 570% this year alone. The NAND flash memory specialist has climbed from their
initial $36 to a closing price of a whopping $1,761 per share on June 1.
The company began trading on its own in February of 2025, after being spun off from
Western Digital.
Sandisk posted staggering fiscal third-quarter earnings (ending April 3, 2026) up 97% from
Q2 alone, with a year-over-year increase of 251% to $5.95 billion.
Sandisks’ profitability moved even faster. Their non-GAAP (adjusted) reached 78.4%, up
from 51.1% in Q2, and from 22.5% just one year ago. The per-share earnings reached
$23.41, well above their own projected $12 to $14.
And their acceleration reflects the company’s redirection bit supply toward higher-value AI
infrastructure customers.
Management is now formalizing that redirection in what they call New Business Models
(NBM), multi-year supply contracts backed by firm financial guarantees. Sandisk ended Q3
with three signed NBMs, and has another two since, making a grand total of five. The three
signed during the quarter carry about $42 billion in remaining performance obligations, and
the five together included more than $11 billion in guarantees.
In short, customers get close to what is “locked in” supply, while Sandisk gets unusual
visibility into demand.
While NAND has historically been one of the most cyclical segments of the semiconductor
industry, and long-term memory contracts have unraveled during downturns, the NBM’s
are supposed to make this cycle different. Still, they are new and the variable pricing
components could lead to spot price drops, and flow through to results.
And competition from rivals like Samsung and SK Hynix could weigh on the business and
the stock.
While Sandisk is structurally a very different company than it was one year ago, as its
soaring stock price indicates, and while investors are getting a new Sandisk thanks to the
contracts, data center mix and cash generation, they are still exposed to the risks of the old
Sandisk, namely cyclicality.
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