U.S. storage stocks rose across the board, Western Digital, Seagate, and SanDisk soared to new highs, and Micron entered the

# Zhao Ying

Source: WallStreetCN

Micron Technology closed above a **$500 billion market cap** for the first time, entering the top 16 most valuable companies in the S&P 500. SK Hynix warned that chip wafer shortages will last until 2030. SanDisk has surged nearly **200%** year-to-date. Amid multiple catalysts, Morgan Stanley’s call that the memory sector was “cooling down” has been sharply contradicted by market reality.

The AI-driven wave of demand for memory chips is pushing the entire sector to new highs.

U.S. stocks closed higher on Tuesday, with the memory and data storage sector rallying across the board.

Micron Technology’s market capitalization **closed above $500 billion for the first time**, officially becoming one of the 16 most valuable companies in the S&P 500. SanDisk, Western Digital, Seagate, and other stocks also hit fresh highs.

The rally was driven by several key catalysts:

- After the bell on Monday, Micron announced that **HBM4 high-bandwidth memory chips for Nvidia’s next‑generation Vera Rubin AI platform have entered mass production**, removing market doubts over its supplier status.

- On Monday, SK Group Chairman Chey Tae‑won said the global chip wafer shortage is expected to **last until 2030**, with a potential gap exceeding 20%, and hinted at a new plan to stabilize DRAM prices, further boosting sentiment.

Supported by these developments, the memory sector rallied broadly:

- Western Digital rose over 9%

- Seagate Technology gained over 5%

- Micron climbed over 4%

- SanDisk jumped 19.52% in the past five sessions, with a **196% year-to-date gain**

Morgan Stanley’s chief U.S. equity strategist Mike Wilson had previously warned the memory sector had “cooled down,” but current market action has sharply diverged from that view.

## Micron closes above $500 billion for the first time

Micron closed at **$461.69** on Tuesday, with a market cap of **$519.64 billion** — its first close above the $500 billion threshold, according to Dow Jones Market Data. The stock briefly touched the milestone intraday in the prior session but failed to hold into the close.

The achievement places Micron among just 16 S&P 500 members with a market cap of $500 billion or more. Notably, Micron first crossed $400 billion only two months ago, reflecting extremely strong optimism around AI‑driven memory demand.

Micron’s HBM4 mass‑production announcement was the direct trigger for the latest leg higher.

Only three companies globally can manufacture HBM4: Micron, SK Hynix, and Samsung Electronics. Demand for this high‑end memory is surging as AI models scale rapidly.

## Tight supply-demand underpins the bull case

Several analysts argue the supply‑demand imbalance in memory will sustain pricing power for Micron and peers.

- Deutsche Bank’s Melissa Weathers noted DRAM supply tightness is expected to **last through 2027**. HBM requires far more wafer input than traditional DRAM, supporting higher average selling prices, revenue, and margins.

- Rosenblatt’s Kevin Cassidy expects the upcycle to extend at least through Q4 fiscal 2026, as “meaningful new wafer capacity” will not come online until mid‑2027 at the earliest. Micron’s newly acquired Powerchip P5 fab in Taiwan is not expected to support material shipments until fiscal 2028.

- RBC’s Srini Pajjuri said even softness in PC and smartphone demand would be “largely offset” by AI and data center demand, which now accounts for more than half of DRAM revenue. He sees strong HBM and DDR demand extending through 2027.

## SK Hynix reinforces industry cycle optimism

SK Group Chairman Chey Tae‑won’s comments provided fundamental support for the entire sector.

He forecast the global wafer shortage will **persist until 2030** with a gap above 20%, matching analyst expectations and reinforcing confidence in higher memory price levels.

Chey also disclosed that SK Hynix is evaluating a U.S. ADR listing to expand its global investor base.

In addition, he hinted the CEO would soon announce a **new plan to stabilize DRAM prices**, drawing strong market attention.

As a key HBM supplier to Nvidia, SK Hynix is at the center of the AI chip demand boom.

Its comments, combined with Micron’s HBM4 production start, formed a dual catalyst for the sector rally.

## SanDisk leads strong sector-wide performance, challenging “cooling” calls

SanDisk stood out with a **19.52% gain in five days**, **196% YTD**, and an **~1184% rise over 12 months**.

Western Digital and Seagate gained ~17.17% and ~9.92% in five days, respectively, with triple‑digit gains over the past year.

This contrasts sharply with Mike Wilson’s recent view that leadership areas like memory had “clearly cooled recently.”

He warned investors to prepare for a potential “final leg down” or “capitulation shock,” citing Fed hawkishness, inflation fears, and escalating geopolitical conflicts.

However, the expected pullback in memory has not materialized, and investors have continued to profit.

Wilson also noted that once the market hits a clear low, investors should “prepare to add exposure ahead of the bull market recovery.”

## Earnings ahead: market awaits validation

Micron is set to report quarterly results on Wednesday, March 18, with sentiment already elevated.

According to FactSet consensus estimates:

- Fiscal 2026 Q2 revenue: ~**$19.8 billion**, up ~145% YoY

- Adjusted EPS: ~**$9.19**

- Net income: ~**$10.3 billion**, up ~489% YoY

Cassidy said investors will focus on two key issues:

1. Whether Micron can maintain pricing terms in long‑term supply agreements while expanding wafer capacity.

2. Whether elevated memory prices have started to destroy demand, with some customers switching to alternatives or delaying purchases.

On Sunday, Micron also completed the acquisition of Powerchip Semiconductor’s P5 fab in Tonglu, Taiwan, which will expand cleanroom capacity for DRAM production including HBM.

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