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Memory stocks tumble… Apple forced to raise prices… Memory trading today and who’s going to win… Your MU earnings list for tomorrow… Last chance for a ‘time machine’ tomorrow
As I write on Tuesday morning, my memory reserves are starting to run low.
micron(in), sandisk (Your support), And the South Korean artificial intelligence memory giant SK Hynix All fell by double digits as investors unpacked one of the hottest (and busiest) trades of the year ahead of Micron’s earnings tomorrow.
At first glance, investors appear to be sending a very different message than the one sent by Apple CEO Tim Cook last week.
Cook warned that memory prices had become so extreme that Apple could no longer absorb the costs.
So, who is right?
market? Or Tim Cook?
Well, let’s go back and better understand what Apple is telling us about one of the most important supply shortages in the AI economy.
Tim Cook calls it the “100-year flood”
For months, Apple CEO Tim Cook has been trying to control memory costs by absorbing suppliers’ price increases rather than passing them on to customers.
That’s over.
Cook said last week The Wall Street Journal Price increases are “unavoidable” due to ongoing memory shortages:
We are doing our best to mitigate the huge increases passed on to us, and we have been trying to protect our customers from the increases, but the situation has become unsustainable.
At the heart of this problem is one problem: memory, the chips that power almost every computer you own.
here Wall Street Journal With a good way to think about it:
Memory, also called DRAM, and storage, also called NAND, are like the elements of a mid-20th-century desk: Memory is a desk that holds all the paperwork a worker needs to perform a task, while storage is the filing cabinet that holds everything else.
Your iPhone uses both. So does your laptop, your car, and your doctor’s medical equipment.
Source: Bagus Hernawan
So, what’s the problem?
Well, AI eats all of that.
Memory prices are skyrocketing with no relief in sight
AI servers are memory-hungry in a way that regular computing has never been — with a single AI server requiring approximately eight to 10 times the memory of a traditional server.
This has led to huge demand – and soaring prices…
Since last year when Google (Google), Microsoft (MSFT), dead (dead), and Amazon (Amzn) The company began announcing massive increases in its capital spending on artificial intelligence, and the prices of memory and storage chips quadrupled.
The three companies that dominate DRAM production — Micron, SK Hynix, and Samsung — have responded by redirecting their manufacturing capacity toward the specialized, high-bandwidth memory that AI customers demand. This leaves less supply for everyone.
Cook said it clearly:
There is less supply at a time when consumers want hardware and the memory guys are passing on huge price increases.
We definitely need memory pricing and supplies to return to reasonable levels for consumer products. That’s the point.
Apple is one of the largest buyers of memory on the planet, spending just under tens of billions of dollars annually. Historically, it has used this leverage to extract the lowest prices from suppliers, playing them off against each other.
But with the balance of supply and demand shifting so radically today, that has changed. Even Apple is feeling the effects.
Back to cooking:
This is a hundred-year flood.
I haven’t seen anything like this in any area in over 40 years.
When the world’s most powerful hardware buying machine can’t negotiate a commodity price shock, it tells you something specific about the demand dynamics under it.
Which brings us to the investment implications…
Stocks that profit thanks to the lack of memory
If memory stocks are in such high demand, why are they down today?
Part of the answer is simple: These stocks have already seen massive inflows so far this year.
Micron entered the day up nearly 300% in 2026. SanDisk shares are up more than 700%. When investors lock in gains like these, it doesn’t take much to trigger profit-taking.
Adding to the pressure is Micron’s announcement of its profits after tomorrow’s close. Traders often make gains ahead of major reports, especially after a stock has already enjoyed a significant rally.
But if you’re worried that today’s sell-off points to the top, let’s shift our focus back to the balance of supply and demand and pricing.
This is our technology expert Luke Lango. From his daily notes in Innovation investor Last week:
Pricing power micron(in), LAM Research (LRCX), Kosovo Liberation Army (clutch), ASML (ASML), applied materials (huge), SanDisk (Your support), Seagate (STX) and Western Digital (WDC) It is not a temporary, cyclical phenomenon.
It is a structural reflection of demand moving faster than supply can respond – the hypothesis of a multi-year supply shortage confirming itself in real time.
Luke’s read is that the thesis is still a work in progress: all three major memory manufacturers have previously sold their entire 2026 HBM (High Bandwidth Memory) production under long-term contracts, with demand visibility extending into 2027.
Morgan Stanley expects DRAM chip capacity to grow 30% by 2027 — but even with that expansion, consumer technology chips will still fall short of demand by up to 15%.
However, realize that memory is a historically cyclical industry, and when the oversupply finally arrives, the subsequent repercussions could be brutal if history repeats.
But the numbers indicate that we are not there yet, even if it seems that way today.
To illustrate, Locke points to research shops Wedbush and Stifel, which just raised their price targets on Micron, citing that “both companies point to perpetual demand for AI extending the memory cycle into 2027 and beyond.”
Here’s Luke’s summary:
The cumulative pattern across all of this sell-side activity is the discretionary revision cycle we’ve been describing all week: Actual demand for AI infrastructure consistently exceeds consensus models, analysts revise higher, and stocks are rerated accordingly.
As for Luke’s current location at Innovation investor Across the memory ecosystem — including which names he would buy at current levels versus names that have outperformed themselves — Click here to learn more about joining.
With this in mind, there is one thing to keep an eye on tomorrow
There is a framework we often refer to digest – The Iron Law of the Stock Market developed by the legendary investor Louis Navellier.
In short, stock prices can deviate from earnings trends for a period of time, but over the long term, if a company continues to increase its earnings, its stock price will follow.
This framework is particularly linked to the trade in memory – which brings us to tomorrow…
Micron reports third-quarter earnings after the close. This is what Lewis, editor, said Growth investor – whose number of subscribers increased by 162% in MU – expects to go to:
Third-quarter earnings are expected to rise 930.9% year-over-year. Revenue is expected to jump 270.6% year over year.
The analyst community has revised third-quarter earnings estimates by a whopping 73.8% in the past three months.
Regarding the sell-off this morning, Lewis placed a lot of the blame on the SPCX, which continues to decline. But then he focused on the memory business and Micron, saying:
The results will be ridiculous, and the stock will be the strongest in terms of sales and profits, and we will see how it reacts…
So, hang in there, everyone. Let’s just celebrate Micron’s earnings on Wednesday. We’ll see what the consequences of that are, and what the guidance will be.
Earnings – whether Micron or broad sector earnings – are what we need to watch to see where we are in the memory cycle.
As long as it grows and exceeds estimates, there is more life in the trade.
When earnings start to disappoint, and management starts to decline, then Lewis’s Iron Law will work against us, and caution becomes critical.
We don’t expect that to happen tomorrow with MU. However, this is it the Case to watch.
Specifically, pay attention to three details:
- Whether the guidance on demand for HBM remains strong…
- Whether analysts will continue to raise forward estimates in the following days, and
- Whether management’s comment on seeing demand through 2027 stands firm remains to be seen.
Overall, if these signals remain intact, memory trading will remain intact – despite the tremendous progress to date.
To learn more about joining Louis V Growth investor To help navigate the memory trade, Click here.
Another thing – it is time sensitive
Everything we’ve covered points to the same basic challenge.
The memory trade is real. The structural thesis is sound. But the stocks that made early investors rich, like MU and SNDK, have already made huge moves.
The readers who benefited most weren’t the ones chasing the headlines. They were the ones who saw the bottleneck before Tim Cook had to call it the 100-year flood on the front page of a magazine The Wall Street Journal.
The next trade will work the same way – it always does.
That’s why tomorrow’s event from Mark Chaiken and his colleague Joe Austin is worth your time.
If you have read digest Over the past week, you already know the setup. Mark spent 60 years on Wall Street building analytical tools — including Power Barometer, a 20-factor stock rating system that helped him weather the coronavirus crash, the 2022 bear market and last year’s tariff selloff. Joe spent four decades as a portfolio manager overseeing more than $10 billion in assets.
Together they’ve built what they call the most powerful tool of Mark’s career — an AI-powered platform that scans decades of market history to find stocks whose fundamental and technical fingerprints match the early profiles of proven multipackers, before Wall Street caught on. They call it Time machine.
Tomorrow – Wednesday, June 24 at 10:00 AM – they will reveal it publicly for the first time, In free broadcast.
This is the last call here at digest. If you want to be in the room when they show the arrows that the time machine is pointing at now, Click here to reserve your place.
I wish you a good evening,
Jeff Remsburg
(Disclaimer: I own AAPL, MU, ASML, GOOGL, MSFT, AMZN)
