Musk said the supply-demand dynamics suggest that memory prices would continue to soar.
- Musk owns significant AI infrastructure through Tesla and SpaceX, whose data centers consume large volumes of memory chips.
- Even as tech executives tout record memory demand, chipmakers’ stocks declined sharply last month.
- The retail sentiment was ‘bullish’ for MU, ‘bearish’ for DRAM and SKHY, and ‘extremely bullish’ for SNDK.
Tesla and SpaceX CEO Elon Musk said memory chips remain the biggest bottleneck in building AI infrastructure and that their prices are likely to continue climbing, echoing a view shared by several top technology executives.
Musk said memory demand is not growing at 20% a year, which would already be high for the segment, but is instead rising 200% or more year over year, adding that such dynamics naturally position for a sharp price increase.
Musk’s remarks add to the long-term bullish case for memory manufacturers, dominated by Micron and SanDisk and South Korean majors Samsung and SK Hynix.
“Limiting factor currently is memory. Memory output is increasing by around 20% per year. Now normally that would be fantastically fast and amazing for any large mature industry. But ask yourself is the demand increasing by 20% a year? No, the demand is increasing by 200% a year, maybe higher,” Musk said on SpaceX’s post-earnings analyst call on Tuesday.
“So if you’ve got demand increasing much faster than supply then Economics 101 would suggest that the price increases. It does not decrease.”
Rising memory prices have already prompted gadget makers like Apple and Nintendo to hike prices of certain of their products.
Musk’s A Big Buyer Of Memory
Musk owns significant AI infrastructure through Tesla and SpaceX, whose data centers consume large volumes of memory chips.
Tesla’s AI infrastructure is centered on its Cortex supercomputer at Gigafactory Texas, which trains Full Self-Driving and Optimus AI models.
Across Elon Musk’s companies, the largest compute asset is Colossus in Memphis, originally built by xAI and now part of SpaceXAI, which has already scaled to about 200,000 Nvidia H100 GPUs with a roadmap to 1 million GPUs.
Musk has outlined plans to expand AI data center capacity to as much as 10 gigawatts by 2027, alongside a proposed Terafab facility to manufacture AI compute hardware at scale.
Memory Stocks Have Been Volatile
The latest signal for memory companies comes as the sector goes through a volatile stretch.
Micron stock plunged 29% in July, marking its worst monthly performance since June 2005. The sharp pullback — despite an 18.4% rally on July 30 — underscores the market’s still-fragile sentiment toward chip stocks.
Investors rotated out of high-flying chip stocks and into Big Tech and software names last month. While semiconductor shares still gained in July, the shift suggests volatility may persist as investors search for a more durable footing.
On Stocktwits, the retail sentiment was ‘bullish’ for MU, ‘bearish’ for DRAM and SKHY, and ‘extremely bullish’ for SNDK.
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