This article first appeared on GuruFocus.
Micron Technology Inc. (MU, Financials) is once again in the spotlight. The chipmaker’s shares rose about 2% Monday, leading a broader rally across the memory sector as investors bet that the world’s growing appetite for artificial intelligence will keep pushing chip prices higher.
The momentum reflects a deeper story in the semiconductor world: demand for high-bandwidth memory used in AI servers has exploded, leaving little capacity for other products like smartphone and flash storage chips. Samsung Electronics’ co CEO T.M. Roh called the situation unprecedented, warning that shortages could stretch well into next year.
Micron’s CEO Sanjay Mehrotra has struck a similar tone, saying last month that memory markets could remain tight past 2026. The numbers back him up prices for certain memory products have more than doubled since early 2025, according to research firm TrendForce.
Investors have already rewarded the sector handsomely. Micron’s stock soared 240% last year, far outpacing the 42% rise in the broader chip index. SK Hynix shares nearly quadrupled, while Samsung’s more than doubled.
Analysts at Morningstar and J.P. Morgan think this rally could be just the beginning. They see the current upturn often called a memory supercycle lasting through at least 2027, driven by nonstop AI infrastructure spending around the world.