The booth of Micron Memory Japan KK at the Semicon Japan show in Tokyo, Japan, Thursday, December 18, 2025.
Kiyoshi Ota Bloomberg | Getty Images
Shares of memory companies Micron and Sandisk jumped on Monday, continuing their rally, after Melius Research said demand could remain high through the end of the decade.
Memory companies are reaping huge benefits from the global shortage of microchips to power artificial intelligence. High Bandwidth Memory, or HBM, is directly connected to the most advanced graphics processing units from Nvidia again Advanced Micro Devices that power almost all big data centers AI.
Ben Reitzes, an analyst at Melius, upgraded the stock to a buy rating on Monday, noting that it could gain another 41% over the next 12 months. The stock is up more than 550% in the past year after gaining 5.6% on Monday.
“The market will eventually be willing to pay for the extraordinary tightening of margins and demand profiles that AI makes possible,” Reitzes wrote, adding that he expects Nvidia to invest heavily in memory soon. “We are at the very beginning of this AI cycle and the demand for memory has never been stronger.”
Micron is trading at record highs and its market capitalization is approaching $600 billion.
Sandisk gained 8.1% on Monday and is up more than 3,000% over the past year, pushing its market cap to $157 billion. Reitzes predicted the stock would rise another 36% over the next 12 months.
“The numbers speak for themselves,” said Bernstein analyst Mark Newman, who has a buy recommendation on Sandisk. “Earnings updates are coming in big, and that’s fueled by very strong memory prices.”
HBM is made up of stacks of general-purpose memory known as Dynamic Random Access Memory, or DRAM, which enables fast, temporary data storage so that the GPU can perform parallel operations.
Micron, Samsung and SK Hynix, the world’s leading memory makers, have used much of their DRAM supply to make HBM. The result is a general-purpose memory shortage that has caused prices to skyrocket. According to data from Counterpoint Research, the DRAM market has recorded 30% growth quarter over quarter for two consecutive times, driven by rising memory prices.
That means consumers are paying more for electronics. Gartner predicts that PC prices will increase by 17% this year. Solid-state drives used inside PCs now cost two or three times what they did in December.
Sandisk is a major manufacturer of solid-state drives, which rely on what is known as NAND memory, a type of flash memory that stores data even when the devices are turned off. NAND is experiencing a similar increase in demand as AI servers require increasing amounts of data storage.
Market conditions are pushing memory buyers into longer, three- or five-year contracts. SK Hynix and Micron have both said that hyperscalers are more than willing to sign long-term supply agreements in an effort to end the race to find enough memory. Chip design company Broadcom, for example, is locked into offering memory until 2028.
“Memory makers are also willing to continue for a long time because they want to find reliable demand, especially if they are thinking about adding capacity,” Newman said, adding that it takes two and a half years to build new factories before production begins.
Micron is spending $24 billion on a major expansion of its NAND manufacturing facility in Singapore, while also building major US chip factories in New York and Idaho. SK Hynix has broken ground on its first US memory packaging plant in Indiana, and is expanding production and packaging with new facilities in South Korea.
Sandisk reports quarterly results next week.
WATCH: Micron’s biggest expansion in the US
