Micron and Sandisk Surge as Melius Research Predicts AI-Driven Memory Demand Through Decade

Key facts

• Micron stock rose 5.6% on Monday, up over 550% in the past year.
• Sandisk gained 8.1% on Monday, surging more than 3,000% over the past year.
• Melius Research analyst Ben Reitzes upgraded Micron to buy, projecting 41% upside in 12 months.
• Reitzes also predicted Sandisk will rise another 36% over the next year.
• Micron's market capitalization is approaching $600 billion; Sandisk's exceeds $157 billion.
• DRAM market recorded 30% quarter-over-quarter growth for two consecutive periods, per Counterpoint Research.
• Gartner forecasts PC prices will increase 17% this year due to memory shortages.
• Solid-state drive prices have doubled or tripled since December.

Memory Stocks Rally on AI Demand Forecast

Shares of Micron and Sandisk jumped on Monday, extending their extraordinary runs, after forecasting that demand for memory chips will remain robust through the end of the decade. The surge underscores how the global shortage of semiconductors for artificial intelligence is reshaping the memory industry. Micron gained 5.6% on the day, while Sandisk rose 8.1%. The moves pushed Micron's market capitalization toward $600 billion and Sandisk's past $157 billion. Over the past year, Micron has climbed roughly 550%, and Sandisk has skyrocketed more than 3,000%.

Analyst Upgrades and Price Targets

Ben Reitzes, an analyst at Melius Research, upgraded Micron to a buy rating on Monday, stating that the stock could gain another 41% over the next 12 months. He also predicted Sandisk would rise an additional 36% in the same period. "The market will eventually be willing to pay more for the unusual durability of the margin and demand profiles that AI makes possible," Reitzes wrote in a note. He added that he expects Nvidia to invest more in memory soon. "We are only in the early innings of this AI cycle and the need for memory has never been stronger."

The Role of High Bandwidth Memory and DRAM Shortages

The rally is fueled by soaring demand for High Bandwidth Memory (HBM), a specialized type of memory bonded directly to advanced graphics processing units from Nvidia and Advanced Micro Devices that power most AI data centers. HBM is made from stacks of Dynamic Random Access Memory (DRAM), which provides fast, temporary data storage for parallel computing tasks. Micron, Samsung, and SK Hynix — the world's top memory makers — have diverted much of their DRAM supply to produce HBM, creating a general-purpose memory shortage. According to data from Counterpoint Research, the DRAM market has recorded 30% quarter-over-quarter growth for two consecutive periods, driven by rising prices.

Ripple Effects on Consumer Electronics and Storage

The memory crunch is pushing up costs for consumers. Gartner predicts PC prices will rise by 17% this year. Solid-state drives (SSDs), which rely on NAND flash memory, now cost two to three times what they did in December. Sandisk is a major SSD maker, and NAND is experiencing a similar demand surge as AI servers require increasing amounts of data storage. "The numbers speak for themselves," said Bernstein analyst Mark Newman, who has a buy recommendation on Sandisk. "Earnings revisions are coming up significantly, and that's powered by very, very strong memory prices."

Market Outlook and Investor Sentiment

The sustained rally has drawn attention from Wall Street, with analysts debating whether the current pricing cycle can hold. Reitzes argues that AI-driven demand will provide unusual durability to margins and demand profiles, justifying higher valuations. Micron is trading at a record high, and its market cap is approaching $600 billion. Sandisk's market cap has surpassed $157 billion, and the stock continues to climb. The broader memory sector is benefiting from a structural shift as AI infrastructure buildout accelerates, with Nvidia expected to increase its memory investments.

Broader Implications for the Semiconductor Industry

The memory boom highlights a critical bottleneck in the AI supply chain: while advanced GPUs get most of the attention, the memory chips that feed them are equally vital. The diversion of DRAM to HBM has created a shortage of general-purpose memory, affecting everything from PCs to data centers. As AI models grow larger and more complex, the demand for both HBM and NAND is likely to intensify. The current cycle, analysts say, is different from past memory booms because it is tied to a structural shift in computing rather than cyclical consumer demand.

The bottom line

• Micron and Sandisk shares surged on Monday after Melius Research predicted strong memory demand through 2030.
• Analyst Ben Reitzes upgraded Micron to buy with 41% upside and sees 36% upside for Sandisk.
• AI-driven demand for High Bandwidth Memory is diverting DRAM supply, causing a general-purpose memory shortage.
• DRAM prices have risen 30% quarter-over-quarter for two consecutive periods, per Counterpoint Research.
• Consumer electronics prices are rising: Gartner forecasts 17% PC price increase; SSD prices have doubled or tripled since December.
• The memory cycle is considered structurally different from past booms due to its link to AI infrastructure buildout.