Micron and Sandisk stocks are surging again this week: 2 reasons why memory chip makers are on the rise

The AI data center building boom isn’t fueling just water shortage concerns and GPU-maker Nvidia’s coffers. It is now also firmly making memory chip makers and their investors significantly richer. Yesterday, two of the largest memory makers, Micron Technology and Sandisk, saw their stock prices soar more than 11% in a single trading session. And those gains are small potatoes compared to their five-day increases. But why is this happening? Here’s what you need to know. What’s happened? Yesterday, all four of the Nasdaq’s major memory chip makers saw their stock prices jump. Those four memory makers include: Micron Technology, Inc. (Nasdaq: MU) Sandisk Corporation (Nasdaq: SNDK) Western Digital Corporation (Nasdaq: WDC) Seagate Technology Holdings (Nasdaq: STX) While there is some overlap, the first two on that list, Micron and Sandisk, focus on short-term memory chips (known as RAM), while Western Digital and Seagate specialize in long-term memory, known as SSDs. It’s the short-term memory chip makers, Micron and Sandisk, that saw their stock prices surge the most yesterday—up more than 11%. And both are currently up more than another 5% as of the time of this writing in premarket trading this morning. Western Digital and Seagate rose 5.1% and 4.3% yesterday, respectively, and are up just under 3% today. And looking back slightly longer, over the past five trading sessions, the gains that those memory chip makers have seen are even more stark. As of yesterday’s market close, during the past five trading sessions, Sandisk is up 40%, Micron is up nearly 27%, Seagate is up 33%, and Western Digital is up 19%. That is an astounding jump over such a short time. But the question is, why have these stocks risen so much now? Memory chips become the AI data center bottleneck When the AI boom kicked off in 2023, the most critical component in data center buildouts that companies threw themselves into was the GPU. These graphics processing units were critical components of the