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Why Wall Street thinks US memory maker Micron is the next Nvidia
Micron, the Boise-based memory chip maker, briefly surpassed the market valuations of Meta and Tesla on Thursday before settling back to nearly match them by Friday, closing with a market cap of approximately $1.27 trillion. The company's stock has soared over 236% in the past month, closing at $1,132 per share, after years of trading below $100. This dizzying rise is driven by an AI-fueled shortage of memory chips—both DRAM and NAND, especially High-Bandwidth Memory (HBM)—as AI data center builders like Nvidia, Microsoft, Amazon AWS, Google, Meta, and Oracle buy up massive quantities. The supply crunch, dubbed "RAMageddon," is predicted to persist into 2027, raising prices for consumer electronics such as Apple products and Xbox consoles. Micron delivered blockbuster third-quarter earnings last week: revenue quadrupled year-over-year to $41.45 billion, while profits surged from $1.88 billion to $28.2 billion. The company forecast fourth-quarter revenue between $49 billion and $51 billion. To address Wall Street's concerns about the historic boom-bust cycle in memory chips—where costly capacity expansions often coincide with demand drops—Micron emphasized 16 long-term strategic customer agreements, including deals with Nvidia and AI lab Anthropic. These agreements, spanning data center, consumer, and auto markets, are intended to stabilize earnings. Analyst Sebastien Naji of William Blair noted that demand growth continues to outpace new cleanroom capacity, and the growing set of long-term contracts improves revenue visibility, leading to an Outperform rating. Whether Micron can avoid a bust cycle remains uncertain, but for a moment on Thursday, it was valued higher than industry giants Meta and Tesla.