Key insights
- The author predicts a prolonged boom in the chip/memory sector driven by AI, particularly data center DRAM and HBM. Strong demand from AI infrastructure buildout, coupled with manufacturing challenges, will lead to sustained growth. The Apple-Intel agreement and hyperscaler capex cycles are cited as evidence. Micron (MU) is expected to reach a $1000+ valuation by mid-2027.
Writing this on May 8th. People have gotten it wrong, analysts have gotten valuation wrong. The chip/memory sector is going to be larger than what is currently estimated
Companies are pre-ordering like there's no tomorrow. I mean, just look at apple-intel agreement publicized today.
Data center DRAM is also booming. AI servers need 10-12x more RAM than traditional servers. When hyperscalers deploy AI infrastructure, they're not just buying GPUs they're rebuilding entire data centers with massive memory configurations. That's a multi-year capex cycle, not a one-time thing. We're literally in year 1 or 2 of this buildout.
On top of that, manufacturing HBM at scale is genuinely hard. It takes years to build new capacity. Meanwhile, demand from AI is accelerating faster than most people predicted. We're not just talking about inference servers either, training infrastructure demands are still ramping. EACH DURATION OF CYCLE IN CHIP SECTOR IS EITHER SIGNIFICANTLY PROLONGED OR NO LONGER WILL BE EXISTING
MU will be 1000+ company by mid 2027
Mark my words