Micron Technology’s Stock Surge

Memory chipmaker Micron Technology (NASDAQ:MU) saw its shares surge nearly 15% on Thursday, following its optimistic first-quarter revenue outlook. This highlights robust demand and pricing for high-bandwidth memory chips (HBM) essential for the fast-growing generative AI sector.

Micron, a key supplier to AI darling Nvidia (NASDAQ:NVDA), boosted its market capitalization by roughly $15 billion in a day. The stock surged around 27% in the past three weeks.

In its fourth-quarter results, which ended on August 29, Micron reported its strongest quarterly revenue growth in a decade, with its current forecast significantly surpassing Wall Street expectations.

In the wake of the report, an analyst at Mizuho remarked that it’s “really not a good day to be short memory and semi-cap equipment stocks.”

“For the memory and semi cap eqpt bears, I would advise against going down in a ball of flames and cover shorts and consider getting long some key semi winners even if you dislike MU and not willing to chase this 15%+ rip at the open,” he added.

“Personally, I think the MU rally will sustain and pull in many of these long/short haters who will flip from short to long at least for the near term.”

Meanwhile, Samsung Electronics (KS:005930)‘s strategy for conventional DRAM capacity and bit growth remains a significant uncertainty in the memory market through 2025. Like Micron, Samsung also produces AI memory chips.

However, Mizuho believes two factors could mitigate potential aggressive moves by Samsung in the conventional DRAM market:

1. Micron is aggressively shifting focus away from lower-margin PC and smartphone segments toward higher-margin, high-value products like HBM servers and data center chips. Micron management remains confident that their technology leads in power and performance over competitors such as SK Hynix Inc (KS:000660) and Samsung.
2. The U.S. government is expected to add China’s leading DRAM manufacturer, ChangXin Memory, to the entity list, severing their access to global semiconductor equipment imports.

While this won’t stop China from producing conventional DRAM for PCs and smartphones, it will “materially reduce the risk over coming years that China can flood the DRAM market with supply and crush pricing or take market share,” the analyst emphasized.