A crucial chip scarcity is placing a tough ceiling on AI — and driving the subsequent wave of positive aspects…
Hiya, Reader.
Micron Know-how Inc. (MU) and elephants appear to have as little in frequent as, nicely, a semiconductor producer and a several-ton land mammal.
However they do share one frequent trait: celebrated reminiscence.
Elephants, after all, retailer reminiscence cerebrally. Micron, however, designs and produces pc reminiscence and storage chips, together with…
- DRAM (dynamic random entry reminiscence) – the quick, short-term reminiscence that computer systems use to suppose and work in actual time.
- NAND (quick for “NOT AND”) – the nonvolatile storage expertise that may retain information and not using a energy supply. It’s a kind of flash reminiscence used for long-term storage.
Micron’s reminiscence expertise is used, amongst different locations, in synthetic intelligence, information facilities, computing, autos, and cell units.
At this time, the corporate is rallying as demand for its reminiscence chips soars, pushed largely by shortages attributable to heavy use of reminiscence in Nvidia Corp. (NVDA) chips.
The corporate is up round 11% over the previous 5 days, forward of its second-quarter earnings report later right now, and 63% to date in 2026. The rally has elevated Micron’s market cap to $525.4 billion, surpassing Oracle Corp. (ORCL), which is now price $440.6 billion.
Micron CEO Sanjay Mehrotra informed CNBC in January…
Reminiscence is a key enabler of AI. It’s a strategic asset right now, not like only a element within the system. And so we want it. Identical to your mind, you want extra reminiscence. You want quicker reminiscence.
And the memory-chip scarcity exhibits no indicators of easing, with the tech business’s prime gamers spending file sums to remain aggressive within the AI race.
Which means reminiscence corporations might be among the many subsequent wave of AI inventory winners.
In the meanwhile, Micron is likely one of the most important beneficiaries of AI’s second wave. However I anticipate {that a} smaller set of asset-heavy corporations would be the largest winners.
At this time, I’ll element why reminiscence is quietly turning into a crucial AI chokepoint. Then, I’ll share how one can capitalize on the chance.
AI Wants Reminiscence
All reminiscence chips and information storage are crucial to the AI Revolution, however the demand for DRAM is skyrocketing particularly as a result of fashionable AI workloads are extraordinarily reminiscence intensive.
And DRAM is the one kind of reminiscence that may sustain.
Giant language fashions (LLMs) and different generative AI fashions have billions, and even trillions, of settings that the system must preserve in reminiscence. DRAM shops all these settings and the short-term calculations the mannequin makes whereas working.
For instance, coaching ChatGPT-sized fashions can require tens to a whole bunch of terabytes of DRAM throughout graphics processing models (GPUs).
In a world with out sufficient DRAM, the AI Revolution hits a tough ceiling as a result of it runs out of house to suppose.
No reminiscence means no intelligence.
Nvidia CEO Jensen Huang first raised the alarm bells on DRAM earlier this yr, saying the “reminiscence bottleneck is extreme.”
There have even been media reviews that representatives from AI corporations have moved into long-term keep motels in South Korea, desperately “begging” for DRAM allocation from the opposite two suppliers: Samsung Electronics and SK Hynix.
These buying managers from Silicon Valley have really been nicknamed “DRAM beggars.” And the massive DRAM producers in South Korea have needed to police their clients’ purchases to stop hoarding.
Furthermore, this DRAM scarcity has no finish in sight.
Almost 100 gigawatts (GW) of recent information facilities are scheduled to come back on-line over the subsequent 4 years. So, we are able to estimate meaning about 50 GW over the subsequent two years.
Nonetheless, there’s solely sufficient DRAM to assist the build-out of about 15 GW of AI information facilities over the subsequent two years.
That’s an enormous provide downside.
In early February, market researcher TrendForce raised its chip worth forecasts, projecting that typical DRAM contract costs will surge 90–95% within the first quarter of 2026, in comparison with the fourth quarter of 2025.
This is likely one of the quickest pricing spikes the reminiscence business has ever seen.
The DRAM beggars will proceed to bid the worth up, ensuring suppliers the potential beneficiaries of this high-stakes bottleneck.
This can be a pricing energy story, and meaning it’s vital to get in on the chance early.
Right here’s how…
Personal the Bottlenecks
Simply a few hours in the past, I held my FutureProof 2026 particular occasion. And I need to thank all of you who joined me there.
My message was a easy one: AI demand continues to blow up, however it’s constrained by real-world bodily bottlenecks in vitality, uncooked minerals, and reminiscence.
Micron’s spike on reminiscence demand couldn’t be extra pertinent.
So, right here’s my actionable recommendation: You need to personal the bottlenecks, not the hype.
Micron sits on the middle of a type of bottlenecks. However that doesn’t routinely make it one of the best funding. The corporate is already extensively adopted, closely owned, and priced as an AI beneficiary.
As an alternative, I imagine the largest winners within the reminiscence bottleneck might be these with heavy belongings – not the memory-chip makers themselves, however the suppliers of the infrastructure required to produce the chips – and the least competitors.
At my FutureProof 2026, I shared 5 tickers – freed from cost – that meet these standards. I imagine these are corporations to observe within the reminiscence house.
You can watch a replay of my broadcast here and get immediate access to those names.
I additionally element two different main bottlenecks affecting the AI buildout: uncooked supplies and vitality. And I share 5 extra corporations for every corresponding bottleneck.
To watch my free event, simply click here.
Regards,
Eric Fry
