Micron is about to become a $400 billion company just weeks after hitting $300 billion market cap
Micron is on pace to reach a $400 billion market cap for the first time on Friday.
Micron Technology is set to be worth $400 billion only a few weeks after topping $300 billion valuation as the largest U.S. maker of memory chips rides the artificial intelligence demand boom.
Shares of Micron (MU) rose more than 6% late afternoon Friday, trading at more than $356, on track to close with a market capitalization above $400 billion for the first time, according to Dow Jones Market Data. The stock has to close at $355.39 to achieve that $400 billion mark, the data showed. Micron crossed $300 billion in market valuation on Dec. 22.
The memory-chip maker has gained over the last year as memory shortages driven by increasing AI demand give Micron and its competitors more pricing power.
South Korean-listed shares of Samsung Electronics (KR:005930) and SK Hynix (KR:000660) jumped earlier this month after reports that the companies were looking to raise prices for dynamic random-access memory by up to 70% this quarter. Demand from AI chip makers such as Nvidia (NVDA) for high-bandwidth memory, a type of DRAM, has benefitted the three top memory chip makers.
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Morgan Stanley analyst Shawn Kim named Micron as one of his global top 10 stock picks among DRAM suppliers as memory capacity remains constrained while there's "unusually long" visibility into order demand from an increase in AI inference, or running AI models after training.
Kim said in a Thursday note that execution and transition are a risk for memory players this year rather than demand. He sees memory prices going higher and other "favorable conditions" in the industry continuing through next year.
Access to memory components is becoming more important for AI developers. Reasoning models with longer context, image and video-generation capabilities and the adoption of AI agents require more memory than previous AI models, Kim said. That is leading pricing power for Micron and other memory companies to shift "at lightning speed," he said.
Kim's team projects that text-only AI inference could make up 35% of global memory supply for DRAM and 92% of supply for NAND, another type of memory, this year. And they see potential upside to the 70% price hikes for both memory types, citing checks of the supply chain.
Micron's stock was also benefiting on Friday from news that Mark Liu, a board member and former executive at Taiwan Semiconductor Manufacturing Company (TSM), purchased more than 23,000 Micron shares this week, translating to about $7.8 million worth of stock.
The stock move "tells you all you need to know about [Micron] and memory stock sentiment right now," Mizuho desk-based analyst Jordan Klein said in a Friday note to clients. With Micron's stock already on a run, Liu's purchase shows confidence that it can go higher. Micron's stock is up 13% so far this year.
Klein also noted that Micron's DRAM capacity is expected to be flat this year as it waits for more clean-room space, where semiconductor manufacturing takes place, in 2027.
The lack of clean-room space in the near term coupled with growing demand helps make a case for more bullish investors, Klein said.