Memory stocks shine in messy day for markets
Micron and Sandisk shook off an otherwise “meh” tech sector performance Monday after the two memory bellwethers received an analyst initiation.
It was a “buy” on both counts from Melius Research, adding to the growing consensus view that there’s no end in sight for data center-related storage demand as the AI capital-spending boom continues.
The newly minted Sandisk watchers at Melius slapped a target price of $1,350 on the stock — a 36% premium to Friday’s close. Their target for memory chip maker Micron was $700, a 40% premium to Friday’s close.
The reason? (At this point do we even have to ask?)
Obviously it’s optimism that the parabolic surge in pricing power for memory products amid the AI boom can last.
Analyst Ben Reitzes argues that memory sellers may effectively offer “subscriptions” — aping the software business model that they’re helping to displace — in a way that protects their margins over time.
Other AI memory plays had something of a mediocre day: hard disk drive maker Seagate Technology Holdings was up, while its arch rival, Western Digital, was down. But the optimistic tone of the note was enough to send Micron and Sandisk to new record highs on an intraday basis. (Sandisk has to close above Friday’s $2,965.66 and Micron has to close above Friday’s $541.59 for the records to stick.)
Obviously, new records are an old hat for both companies. Micron and Sandisk have been on a romp for much of the past 12 months, in which they’re up a cool 550% and 3,100%, respectively.
The newly minted Sandisk watchers at Melius slapped a target price of $1,350 on the stock — a 36% premium to Friday’s close. Their target for memory chip maker Micron was $700, a 40% premium to Friday’s close.
The reason? (At this point do we even have to ask?)
Obviously it’s optimism that the parabolic surge in pricing power for memory products amid the AI boom can last.
Analyst Ben Reitzes argues that memory sellers may effectively offer “subscriptions” — aping the software business model that they’re helping to displace — in a way that protects their margins over time.
Other AI memory plays had something of a mediocre day: hard disk drive maker Seagate Technology Holdings was up, while its arch rival, Western Digital, was down. But the optimistic tone of the note was enough to send Micron and Sandisk to new record highs on an intraday basis. (Sandisk has to close above Friday’s $2,965.66 and Micron has to close above Friday’s $541.59 for the records to stick.)
Obviously, new records are an old hat for both companies. Micron and Sandisk have been on a romp for much of the past 12 months, in which they’re up a cool 550% and 3,100%, respectively.
