Micron, a U.S.-based memory chip manufacturer, and SK Hynix, a major AI chip producer from South Korea, have each seen their market capitalization soar past $1 trillion.
Micron's shares jumped over 19% on Tuesday, while SK Hynix's stock rose more than 11% on Wednesday morning, enabling both major players to join the trillion-dollar club amid the ongoing fervor for AI-related stocks.
Micron's (MU) stock rally followed UBS's significant upward revision of its price target from $535 to $1,625 per share, citing the company's potential for sustained long-term revenue through contracts with relatively fixed pricing, which would enhance business stability going forward.
UBS stated in its report, "We believe the market will begin to assign more normalized valuations to the company, and Micron has further upside potential if the structural changes AI is bringing to the memory industry become more evident."
The new price target also implies that Micron's shares could more than double from their closing price last Friday.
Micron is among the newer chip manufacturers benefiting from AI competition, as investors flock to stocks related to both central processing units (CPUs) and memory chips—key components for running and processing agentic AI systems in a field previously dominated mainly by Nvidia.
Micron's stock has already tripled since the start of the year, and just a few weeks ago, its market value surpassed $700 billion, placing it among the highest-valued U.S. technology companies.
SK Hynix's stock price in South Korea has steadily climbed throughout the year, surging about 250% since January, driven by soaring demand for High-Bandwidth Memory (HBM) chips used in AI servers and AI accelerator chips.
SK Hynix has become a crucial supplier to Nvidia, which dominates the global AI chip market, positioning the company firmly at the center of the global AI supply chain.
SK Hynix's rise comes just weeks after domestic rival Samsung Electronics also surpassed a $1 trillion market cap, with Samsung shares increasing more than 6% on Wednesday.
Together, these two chipmakers account for over 40% of the KOSPI index, South Korea's main stock market index, highlighting how closely the Korean stock market's direction is tied to global demand for AI and memory chips.
Global investment strategists from KB Financial Group suggest SK Hynix's stock rally may not be over, noting that earnings forecast upgrades are outpacing stock price gains, indicating the current valuation may still be undervalued as analysts raise profit estimates faster than stock prices rise.
The surging AI demand has caused a global shortage of memory chips, preventing manufacturers like Micron, SK Hynix, and Samsung Electronics from increasing production capacity quickly enough to meet market needs. However, this situation has allowed producers to continuously raise chip prices.
Nonetheless, some analysts warn that excessive market reliance on chip stocks could increase volatility and risks to the index, potentially causing problems in supply chains and slowing global data center investments.
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