Nintendo climbs for third day as China ramps up its memory production

Nintendo shares are climbing on Tuesday, marking the company’s third straight session of gains — something it hasn’t done since early March. The Mario maker’s US-listed ADRs were up about 4% in Tuesday morning trading.

The return of the Switch 2 game bundle appears to have stoked investor optimism in the company’s console sales, while China’s accelerating memory production plans could alleviate some of Nintendo’s pain from the “RAMpocalypse.” For the better part of a year, memory prices have surged as AI demand hoovers up compute power. That’s squeezed video game console makers — and the broader consumer electronics industry.

Tracking the performance of Nintendo ADRs against memory giant Micron helps put this move in perspective. Nintendo is a big memory consumer, and not in the front of the line in terms of securing supply. Micron, obviously, benefits from its offerings being in high demand.

Tuesday’s price action is just a drop in the bucket, and comes as part of a recent stretch where the stock market’s high-flyers are having their wings clipped while beaten-up laggards rally.

In its first-quarter results on Monday, Chinese DRAM producer CXMT said it’s ramping up production and issued bullish guidance. The company is planning an IPO later this year, and it could be China’s biggest of the year.

For Nintendo, more global memory production could see rising costs start to deflate, improving margins in a vital year for its new console.