Memory stocks are rallying again as analysts and buyers signal elevated demand and surging prices.
- Apple’s outgoing CEO, Tim Cook, said memory prices are soaring and that the “situation has become unsustainable,” adding that price increases across Apple’s products are unavoidable.
- Deutsche Bank and Citi raised their price targets on Micron stock earlier this week, citing elevated DRAM demand in the years ahead.
- SK Hynix and Samsung Electronics stock rose sharply in Seoul on Thursday, pushing DRAM up 6%.
Micron and other memory stocks were ripping higher in the overnight session ahead of Thursday after Apple’s Tim Cook said surging costs of memory and storage chips would drive price hikes in Apple products.
The comment from the world’s top consumer gadget company is only the latest signal of the incredible demand for memory chips, which has driven shares of key producers sharply higher over the last year.
Western Digital shares rose 4.6%, while Micron shares rose 4%. SanDisk and Seagate stock added 3.8% each. The Roundhill Memory ETF (DRAM) rose 6%, tracking sharp gains in shares of SK Hynix and Samsung Electronics in Seoul on Thursday.
SK Hynix, Samsung and Micron are the top three holdings of DRAM.
Apple Flags Soaring Memory Prices
In an interview with the Wall Street Journal, the outgoing Apple CEO said: “Price increases (for Apple products) are unavoidable.”
“We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.”
Apple primarily sources DRAM (RAM) for iPhones, iPads, and Macs from Samsung, SK Hynix, and Micron, the world’s three leading memory-chip manufacturers. For NAND flash storage, the iPhone maker relies mainly on all major players, including Kioxia, Western Digital, SanDisk, and Micron.
In recent years, Samsung, SK Hynix, and Micron have remained Apple’s core memory suppliers.
Memory-chip stocks have rallied over the past year amid surging demand for storage chips and components from data centers. While companies and analysts still expect strong growth ahead, investors are increasingly debating how much of that optimism is already priced into shares and how much upside remains.
Retail, Analyst View On MU, SNDK, STX, WDC
About 70% of the over 3,000 users who voted in a Stocktwits poll said they remain bullish on the memory-chip sector and expect the rally to have further room to run.
Notably, after Micron and SanDisk enjoyed the spotlight, Western Digital appears to be emerging as the frontrunner. The WDC stock has rallied 46% in just five sessions.
Meanwhile, Deutsche Bank and Citi raised their price targets on Micron stock earlier this week, citing elevated DRAM demand in the years ahead. Micron is scheduled to report its quarterly earnings on June 24.
On Stocktwits, the retail sentiment was ‘bearish’ for MU and DRAM, ‘neutral’ for SNDK, ‘bullish’ for STX, and ‘extremely bullish’ for WDC.
“$MU $DRAM It’s better to buy DRAM than Micron. It will outperform more due to SK hynix. And the US listing is in July. Then all money will flow from MU to SK Hynix,” a trader said.
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