Memory-chip stocks rallied sharply on Monday, driven by renewed enthusiasm for the artificial-intelligence hardware trade and fresh policy signals from Washington aimed at curbing US reliance on Chinese memory components. Micron Technology (MU) climbed more than 5.9%, while South Korea's SK Hynix advanced 5.6% and SanDisk jumped 8.9%.
The gains extend a remarkable run for Micron, which has surged over 730% in the past 12 months, though the stock remains below its summer peak above $1,200. The latest move comes as investors weigh a combination of tightening supply, accelerating AI-driven demand, and geopolitical developments that could reshape the memory landscape.
US-China tensions add tailwind
A key catalyst was Commerce Secretary Howard Lutnick's statement that the Trump administration is discouraging American companies from using Chinese memory chips. Lutnick told The Wall Street Journal that it is "not great" for US firms to rely on Chinese memory, and that the message has been conveyed directly to Apple.
The comments follow reports that Apple had held early discussions with ChangXin Memory Technologies (CXMT) about potentially sourcing components for devices sold in China. CXMT has expanded rapidly in conventional DRAM, capturing 7% of global revenue in the second quarter, according to Counterpoint Research. However, US rules require American companies to obtain a license before sharing product information with CXMT.
These developments add another potential tailwind for US memory suppliers, as investors return to the AI hardware trade. The policy stance could further limit Chinese memory's access to US markets, potentially benefiting domestic players like Micron and SanDisk.
BofA's bullish Micron forecast
The bigger catalyst for Micron, however, came from Bank of America, which reiterated its Buy rating and $1,550 price target on the stock—implying roughly 59% upside from recent levels. The bank expects Micron's fiscal 2030 earnings per share to reach between $200 and $250, substantially above Wall Street's current consensus peak estimate of $160 to $170.
BofA's bullish forecast is based on the view that memory could be entering a "structurally stronger phase," rather than another temporary upcycle. The bank considers Micron a top pick, arguing that the company could have significantly greater long-term earnings power than current estimates suggest.
SanDisk is an important part of that argument. BofA believes SanDisk's durable growth outlook provides evidence that the broader memory market may be moving toward a more sustained period of strength. That could mean investors need to look beyond Micron's near-term results and assess how much earnings power the company could generate over the longer term.
Memory demand remains tight
SanDisk CEO David Goeckeler has pointed to changes in the company's business model that could reduce its exposure to the memory industry's traditional boom-and-bust cycle. SanDisk is moving toward multi-year customer agreements, increasing demand visibility from roughly three months to more than four years. Between 50% and two-thirds of supply is now covered by agreements, according to his comments.
Micron Chief Business Officer Sumit Sadana separately said customer demand signals have strengthened since the company's latest earnings report. He expects "very tight industry conditions" to continue beyond 2027. Sadana also highlighted rising demand for high-bandwidth memory as AI workloads expand, with customers increasingly identifying DRAM as their primary constraint—ahead of power, real estate, data-center capacity, and logic wafers.
The combination of stronger AI demand, tighter memory supply, and BofA's more bullish long-term earnings outlook has provided fresh momentum to memory stocks. However, Micron remains below its recent peak, and investors will be watching for further confirmation of sustained strength in the sector.
This article is for informational purposes only and does not constitute financial advice.
