AI Demand Sparks Memory Industry Boom, Micron and SanDisk Enter Valuation Reassessment Period

On April 28, as AI infrastructure continues to expand, global memory manufacturers are becoming one of the biggest beneficiaries of the current AI wave. Melius Research analyst Ben Reitzes has given Micron Technology and SanDisk a ‘Buy’ rating for the first time, with two-year target prices set at $700 and $1350, respectively. The analysis suggests that the explosive demand for HBM (High Bandwidth Memory) and NAND flash memory from AI data centers is reshaping the profitability model of the semiconductor industry. Unlike traditional SaaS software companies facing usage-based billing pressures, memory manufacturers are locking in revenue and gross margins through long-term procurement agreements of 3 to 5 years, creating a new business model akin to ‘reverse SaaS.’ Currently, NVIDIA and Advanced Micro Devices are heavily utilizing HBM solutions, driving global DRAM resources increasingly towards AI applications. Samsung Electronics, SK Hynix, and Micron have all shifted significant DRAM capacity towards HBM production, resulting in a tightening supply of general memory and rapid price increases. At present, Micron’s market value is approaching $600 billion, while SanDisk has seen a cumulative increase of over 3000% in the past year, with a market value exceeding $157 billion. Analysts believe that if demand for Agent AI and physical AI continues to expand, there may still be room for further upward adjustment in the memory industry’s valuation.