Micron Memory Japan Co., Ltd. booth at the SEMICON Japan exhibition held in Tokyo on December 18, 2025.
Kiyoshi Ota | Bloomberg | Getty Images
Shares in memory companies Micron and SanDisk soared on Monday, extending long-term gains after Melius Research said demand could remain high through the end of the 2010s.
Memory companies are experiencing big gains due to a global shortage of microchips that power artificial intelligence. High Bandwidth Memory (HBM) is coupled directly to the most advanced graphics processing unit. Nvidia and advanced micro device Powers nearly every major AI data center.
Melius analyst Ben Reitz on Monday upgraded the stock to a “buy,” saying the stock could rise an additional 41% over the next 12 months. The stock has risen more than 550% in the past year after rising 5.6% on Monday.
“The market will ultimately pay more for the extraordinary durability of margins and demand profiles that AI enables,” Reitzes wrote, adding that NVIDIA will increase its memory investments soon. “We are only in the early stages of this AI cycle, but the need for memory has never been greater.”
Micron is trading at record levels and has a market capitalization approaching $600 billion.
SanDisk rose 8.1% on Monday and is up more than 3,000% in the past year, giving it a market capitalization of more than $157 billion. Reitz predicted the stock would rise an additional 36% over the next 12 months.
“The numbers speak for themselves,” said Mark Newman, a Bernstein analyst who recommends SanDisk as a buy. “We’re on the verge of a significant correction in earnings, and this is being driven by very, very strong memory prices.”
HBM consists of a stack of general-purpose memory known as dynamic random access memory (DRAM), which enables fast temporary data storage and allows GPUs to perform parallel tasks.
The world’s top memory manufacturers, Micron, Samsung, and SK Hynix, have used the majority of their DRAM supplies to manufacture HBM. As a result, general-purpose memory is in short supply and prices are rising. According to data from Counterpoint Research, the DRAM market recorded 30% quarter-over-quarter growth for the second consecutive quarter due to rising memory prices.
That means consumers are paying more for electronic devices. Gartner predicts that PC prices will rise 17% this year. Solid state drives used inside PCs are now two to three times more expensive than they were in December.
SanDisk is a leading manufacturer of solid-state drives that use so-called NAND memory, a type of flash memory that stores data even when the device is powered off. As the amount of data storage required by AI servers increases, NAND is experiencing a similar surge in demand.
Market conditions are forcing memory buyers into long-term contracts of three or even five years. Both SK Hynix and Micron said hyperscalers are actively seeking long-term supply contracts to secure enough memory to survive the competition. Chip designer Broadcom, for example, has secured memory supplies through 2028.
“Memory manufacturers are also willing to commit for the long term because they want to have more reliable demand, especially if they’re looking to add capacity,” Newman said, adding that it takes about two-and-a-half years to build a new factory before production begins.
Micron is investing $24 billion in a major expansion of its NAND manufacturing facility in Singapore, while also building huge new U.S. chip factories in New York and Idaho. SK Hynix has broken ground on its first U.S. memory packaging factory in Indiana and is expanding production and packaging at a new facility in South Korea.
SanDisk will report its quarterly results next week.
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