A MARTÍNEZ, HOST:
The artificial intelligence investment boom has sparked some stock market jitters. It’s been a volatile few weeks, with investors seeming to swing back and forth between optimism about AI and pessimism about a bubble, but they all seem to like what they saw in the latest earnings report from a company that’s close to it all. Here’s NPR tech correspondent John Ruwitch.
JOHN RUWITCH, BYLINE: Micron Technology is the U.S.’ biggest maker of memory chips. These are not the cutting-edge processing chips used to train AI models, but they work in tandem and are equally indispensable to data centers. With hundreds of billions of dollars flowing into AI, demand for memory chips has skyrocketed. The companies that make these chips can’t make enough, and chip prices have surged, too. The one-two punch of insatiable demand and sky-high prices pushed Micron’s quarterly profits up nearly 15-fold. In after-hours trading last night, its stock price, already up more than 700% in the past 12 months, jumped to new highs.
CJ MUSE: As of today, there’s no slowing down the compute demands out there.
RUWITCH: CJ Muse is a senior managing director at Cantor Fitzgerald, focused on semiconductors. He says Micron’s results show that demand across the chip sector is still booming.
MUSE: We’re in the early innings of AI. Agentic AI is only driving increased demand. And TSMC wafers, DRAM, NAND, substrates, just can’t keep up.
RUWITCH: To decode that chip-world alphabet soup, TSMC is a legendary Taiwanese chipmaker whose production lines are booked solid. DRAM and NAND are crucial types of computer memory for AI, and substrates are the stuff that chips are made of. Other memory chipmakers are killing it, too. Over the past 12 months, shares in South Korea’s SK Hynix are up more than 800%, and the California-based company SanDisk has seen its share price climb some 4,000%. Companies, including Micron, are scrambling to build new factories to expand supply, but that takes time. And on Wednesday afternoon, Micron’s CEO, Sanjay Mehrotra, told analysts on an earnings call that the challenge of meeting demand will not go away anytime soon.
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SANJAY MEHROTRA: Even in 2028, when supply begins to improve gradually, we will see that the demand will continue to be on a robust trajectory as well.
RUWITCH: And that, he says, is because this whole AI thing is a very long-term trend.
John Ruwitch, NPR News.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.
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