Micron Stock Jumps Nearly 5% Toward $1,000 as SK Hynix Blowout Quarter and Memory Shortage Outlook Fuel Rally

Micron Technology Inc. shares rose nearly 5% on Wednesday. Record results from South Korean rival SK Hynix renewed confidence in the outlook for memory chips used in artificial intelligence.

Micron shares gained $45.01, or 4.85%, to $973.77 in late-morning trading on the Nasdaq at 11:13 a.m. EDT. The shares had risen more than 3% in premarket trading.

The gain outpaced the broader market. The Nasdaq Composite was up about 0.4% and the S&P 500 about 0.1% in morning trading.

SK Hynix sparks rally

The rally came after SK Hynix, the world's biggest supplier of high-bandwidth memory for AI processors, reported third-quarter operating profit of 83.3 trillion won, more than seven times higher than a year earlier, on revenue of 104.6 trillion won. Its operating margin reached 80%.

More important for Micron, SK Hynix said it expects memory chip demand to outstrip supply through 2030. It also said long-term agreements with major customers cover more than half of its planned output for 2027 and 2028.

SK Hynix said shipments of its next-generation HBM4 chips began in earnest during the quarter and are expected to overtake older HBM3E chips in shipments and revenue in the fourth quarter.

The company also announced plans to return about $75 billion to shareholders this year. Its U.S.-listed shares jumped nearly 12% on Wednesday.

Analysts upbeat

Bank of America reiterated its buy rating on Micron with a $1,550 price target. Its semiconductor analyst said he came away "incrementally more positive on memory" after SK Hynix's results, according to Investing.com.

South Korea's Hana Securities kept Micron on its list of top global AI investment picks.

Analysts also pointed to comments from Elon Musk predicting that humanoid robots could eventually require more memory than any other application. Some analysts see that as a potentially large future source of demand.

Memory boom

Micron, based in Boise, Idaho, is the largest U.S. maker of memory chips and competes with SK Hynix and Samsung Electronics in high-bandwidth memory.

Demand for memory has soared as technology companies build AI data centers. AI processors from Nvidia and others need large amounts of fast memory, and high-bandwidth memory has become one of the most profitable segments of the chip industry.

The boom has also tightened supply of conventional memory, pushing up prices for DRAM and NAND flash chips used in smartphones, PCs and servers. Some device makers, including Apple, have warned that rising memory costs could pressure their margins.

Micron's shares have soared as a result, at times approaching $1,000.

Cycle concerns ease

Memory stocks have historically been volatile because the industry has gone through boom-and-bust cycles, with prices collapsing when supply catches up with demand. Some investors had worried this year that the current cycle could peak.

SK Hynix's comments about tight supply through 2030, and its long-term contracts with customers, suggest the industry may be more stable than in past cycles. Analysts said that helped ease concerns.

What to watch

Samsung Electronics reports its quarterly results on Thursday, offering another read on memory demand. Major U.S. technology companies, including Alphabet, Microsoft, Amazon and Meta Platforms, also report this week, and their AI spending plans directly affect demand for Micron's chips.

The Federal Reserve announces its interest rate decision Wednesday afternoon.