TLDR
- Barclays says annual AI infrastructure spending could exceed $1 trillion, over $300 billion above current consensus
- Five memory stocks flagged: Micron, Western Digital, SanDisk, Seagate, and Everpure (formerly Pure Storage)
- Micron shares opened at $803.63, with a market cap near $906 billion and a consensus analyst rating of “Buy”
- Central Asset Investments raised its Micron stake by 596.4%, making it the firm’s second-largest holding at $23.9 million
- SanDisk stock has surged over 3,200% in the past year on strong demand for NAND flash memory
Memory chip makers have had a dramatic reversal of fortune. After a brutal 2023 supply glut that crushed profits, the sector is now posting record earnings.
The turnaround is being driven by one thing: AI spending. Technology giants are pouring money into data centers at a pace the industry has never seen before.
Barclays analysts say annual AI infrastructure spending from Western hyperscalers and AI labs could exceed $1 trillion. That would be more than $300 billion above what the market currently expects.
The bank has identified over 400 companies that stand to benefit from this buildout. Among them, five memory chip stocks stand out.
Micron is at the top of the list. The company makes DRAM, NAND, and NOR products built for AI workloads. It recently began sampling a new 256GB DDR5 memory module designed specifically for AI servers.
Micron shares opened at $803.63 on Thursday, giving the company a market cap of around $906 billion. Its 52-week range runs from $90.93 to $818.67, showing just how fast the stock has moved.
Institutional Money Moving In
Central Asset Investments and Management raised its Micron stake by 596.4% in the fourth quarter, making it the firm’s second-largest holding worth $23.9 million.
Several other funds also added to their positions. Brighton Jones raised its stake by 18.3%. Schnieders Capital Management increased its holdings by 67.9%. Around 80.84% of Micron stock is now held by institutional investors.
Wall Street analysts are broadly bullish. JPMorgan raised its price target to $550 with an overweight rating. Barclays lifted its target to $675. Bank of America moved to $500 with a buy rating. The consensus target sits at $495.63.
Micron also raised its quarterly dividend from $0.12 to $0.15 per share.
Other Stocks in the Barclays List
Western Digital was flagged for its hard disk drive storage used in AI training and inference. The company recently beat analyst expectations on both earnings and revenue, driven by cloud storage demand.
SanDisk, described by Barclays as a “pure-play flash memory company,” has seen its stock climb over 3,200% in the past year. That rally reflects demand for high-capacity NAND flash in AI data centers.
Seagate designs and makes hard disk drives and solid-state drives for mass data storage. The company issued strong revenue and profit forecasts, prompting price target increases from Evercore ISI, Bank of America, and Rosenblatt.
Everpure, formerly known as Pure Storage, rounds out the list. It provides memory modules and supply chain services for diverse hardware systems.
Barclays expects AI infrastructure spending to peak around 2028, as advances in AI training efficiency begin to reduce the need for raw compute power.
Director Steven Gomo sold 2,000 Micron shares on May 11th at $787.03, a 10.45% reduction in his position. EVP April Arnzen also sold 40,000 shares in April under a pre-arranged trading plan.
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