AI Computing Power Demand Drives Memory Industry Boom, Micron and SanDisk Enter "Valuation Reassessment Cycle"

BlockBeats News, April 28th. As AI infrastructure continues to expand, global memory manufacturers are emerging as one of the biggest beneficiaries of this AI boom. Melius Research analyst Ben Reitzes initiated coverage on Micron Technology and SanDisk with a "Buy" rating for the first time, assigning price targets of $700 and $1350 respectively over a two-year horizon.

The analysis suggests that AI data centers are driving a surge in demand for HBM (High Bandwidth Memory) and NAND flash, reshaping the semiconductor industry's profit landscape. Unlike traditional SaaS software companies facing pricing pressure based on usage, memory manufacturers are locking in revenue and gross margins through 3- to 5-year long-term procurement agreements, establishing a new business model akin to "reverse SaaS."

Currently, NVIDIA and Advanced Micro Devices heavily utilize the HBM solution in GPUs, driving a continued shift of global DRAM resources towards AI. Samsung Electronics, SK Hynix, and Micron have all redirected a significant portion of their DRAM production capacity to HBM, leading to a tightening of general memory supply and rapid price increases.

Currently, Micron's market capitalization is approaching $600 billion, while SanDisk has seen a cumulative increase of over 300% in the past year, surpassing a market cap of $157 billion. Analysts believe that if demand for Agent AI and Entity AI continues to grow, there may still be room for further upside in the memory industry's valuation.