AI Chip and Memory Shortages Persist, Micron and Sandisk Could Rally After Consolidation
AI data center expansion is driving demand for high-bandwidth memory and storage, while suppliers are struggling to adjust capacity quickly enough. Micron and Sandisk operate in the memory and flash-storage markets, respectively. Tight supply could support product prices and earnings, putting both companies’ business performance and share prices in focus.
As of July 20, 2026, analysts said the recent pullbacks in Micron and Sandisk shares mainly reflected a rotation in market capital, while the shortages of AI chips and memory showed no sign of reversing. Both companies have signed long-term supply contracts to stabilize operations, but reports did not disclose the contract dates or values, or the extent of the share-price declines. The market expects the stocks could have further upside after a period of consolidation.
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The history behind this eventMorgan Stanley Bets on AI-Driven Memory Boom, Sharply Raises Micron and SanDisk Price Targets
AI data centers are consuming large volumes of HBM and server DRAM, crowding out conventional memory production and turning DRAM into a bottleneck for computing-capacity expansion. NAND supplies are also tightening. Morgan Stanley said hyperscale cloud providers remain willing to pay premium prices to secure supply and that shortages could persist for two to three years. Price increases are also set to raise the cost of smartphones, PCs and cloud equipment.
In a June 3, 2026, report, Morgan Stanley analyst Joseph Moore more than doubled his Micron price target to $1,050 from $520 and raised his SanDisk target to $1,750 from $1,100. The report said demand growth continues to outpace supply, with no sign of near-term relief, leaving significant room for further increases in both companies’ earnings forecasts and valuations.
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