Micron Technology Doubles Capex as AI Memory Shortage Deepens

Micron Technology (MU) stock rose 707% over the past year, driven by a memory shortage. The company signed 16 multiyear contracts covering 20% of DRAM and 33% of NAND volume, with $100B in cumulative revenue at minimum prices. Fiscal Q3 2026 revenue was $41.5B, up 346% YoY, with gross margin at 84.9%. Micron plans $27B in capital spending for new fabs, backed by $24.4B in net cash. The stock is 23% below its high, reflecting moderating price gains.

Nvidia (NVDA) reported strong Q2 earnings and raised Q3 revenue guidance to $108B, driving its stock up 9% and boosting tech sector gains. Nasdaq, S&P 500, and Dow closed higher. Other notable movers include Okta (OKTA) +29%, Salesforce (CRM) +23%, and CrowdStrike (CRWD) +20%. Corporate profits surged $400B in Q2, partly due to $71B in tariff refunds.

Micron Technology plans a $10 billion investment in U.S. research labs for AI and advanced computing, according to a company release. President Trump praised the move, attributing it to his administration's policies. The investment aims to create jobs and bolster U.S. leadership in critical technologies, with a focus on memory and semiconductor research.

Micron (MU) CEO Sanjay Mehrotra stated AI has disrupted traditional memory market cycles, with data-center demand 50% higher than supply. Micron has secured five-year agreements with 16+ customers and plans $250B in U.S. manufacturing investments by 2035, including two new fabs. The company also launched a $10B research initiative endorsed by Nvidia and Apple CEOs. Micron's strategy aims to address current shortages, but risks include potential oversupply and capped profits from long-term contra

NVIDIA's Q2 FY2027 earnings revealed a 135% increase in multi-year memory purchase commitments to $279B, signaling strong demand for memory chips. The company also warned of >15% AI server price hikes due to rising memory costs. SK Hynix, Samsung, and Micron saw stock price increases following the news, with Micron (MU) up +0.40%. NVIDIA's margin guidance suggests memory price increases will impact its profitability but benefit memory suppliers.

Micron (MU) was called 'hottest' by Trump, a day after NVIDIA (NVDA) disclosed $279B in memory commitments. MU's stock fell 4% despite a $10B AI lab announcement. NVDA's CFO warned of rising memory prices until 2028. Trump holds MU stock worth up to $6.65M. MU's Q3 revenue was $41.46B, up 345.72% YoY, with Q4 guidance at $50B.