Why does Wall Street think US memory maker Micron is the next Nvidia?

Micron, the Boise, Idaho-based memory chip maker, has captured the heart of Wall Street. Whether the love affair lasts will depend largely on how long the AI-driven supply crunch for memory chips lasts.

Micron promises that it has strengthened its long-term position, which should allow it to withstand sudden drops in demand or excess supply capacity. Wall Street became a believer, helping Micron briefly surpass market cap Mietta and Tesla for the first time on Thursday, although it was back down by Friday to nearly match them.

Specifically, Micron closed trading on Friday with a market cap of close to $1.27 trillion, while Meta stood at $1.39 trillion and Tesla stood at $1.42 trillion. Micron stock has risen more than 236% in the past month alone, closing Friday at $1,132 per share. By comparison, it spent years and years before mid-2025 at less than $100 a share.

It’s a stunning rise for a company that most consumers associate with the small memory cards that were once necessary to boost personal computers, smartphones or other storage devices.

Wall Street isn’t sweating this production line. Micron is benefiting from an AI data center building boom that has led to a shortage of system memory chips, both DRAM and NAND, made by Micron, particularly high-bandwidth memory (HBM). A single AI server requires much more memory than a laptop.

AI system makers like Nvidia, as well as cutting-edge companies that build their own systems, are buying up large amounts of memory, such as Microsoft, Amazon AWS, Google, Meta, and Oracle. This forces all the other companies that need the memory to store it as well, from PC makers like Dell and HP, to other types of hardware makers.

This lack of supply is called… Ramageddonand is expected to continue In 2027. It is already driving up the prices of consumer electronics such as Apple products and Xbox consoles.

With the entire tech industry clamoring for more memory, Micron posted huge third-quarter profits last week. Revenue quadrupled year over year to $41.45 billion, and profits rose from $1.88 billion to $28.2 billion during the same period. Micron also provided a positive outlook, forecasting fourth-quarter revenue to range between $49 billion and $51 billion.

Wall Street, which had been eager to find more AI-related public companies that might perform as well as Nvidia, became even more enamored with it.

The historical problem facing memory chip makers like Micron and Samsung is that building manufacturing facilities to increase capacity is an expensive and time-consuming endeavor. Demand often declines when companies can increase capacity, leading to abundance and a subsequent decline in prices.

Micron has trumpeted any AI talk by confirming a series of long-term supply agreements, including with Nvidia and the AI ​​lab AnthropicAnd he’s supposed to protect her. The company said in its earnings presentation that it has signed 16 strategic customer agreements across the data center, consumer and automotive market segments, which it expects to… Radically transforming its business model.

This appears to have convinced a number of analysts that this company could be another profitable long-term investment. In a research note, Sebastian Nagy, a technology analyst at William Blair, noted that demand growth continues to outpace the rate at which new cleanroom space can be made available.

“Given the strong likelihood of continued ASP growth in the coming quarters and improved revenue visibility thanks to a rapidly expanding set of long-term agreements (SCAs) with key customers, we see potential for more sustainable earnings growth and reiterate our Outperform rating,” Nagy wrote.

It remains to be seen whether Micron can truly sustain itself over the long term without a downward cycle. But for a brief moment on Thursday, this American company was more valuable than some of the industry’s giants.