Memory chip stocks rose in Thursday's premarket trading, led by Micron stock gaining 3.6%, after declining over recent sessions amid U.S.-Iran tensions. The rebound followed U.S. strikes against Iran on Wednesday that caused broader market selloffs, with the S&P 500 declining 1.6%. The gains coincided with SK Hynix announcing plans to triple wafer capacity by 2034, reinforcing strong demand expectations driven by AI growth and data center buildout.
Memory Chip Stocks Gain in Thursday Premarket Trading
Micron stock rose 3.6% in Thursday's premarket session. SanDisk stock gained 3.3%, Seagate Technology stock increased 2%, and Western Digital stock climbed 2.6%. The Roundhill Memory ETF (DRAM), which tracks memory companies, rose 4.5%.
The U.S. launched strikes against Iran on Wednesday, targeting air-defense and radar installations near the Strait of Hormuz. Tehran responded by declaring the critical waterway closed to all maritime traffic. U.S. stock futures were higher in Thursday's premarket session despite the geopolitical tensions.
MU stock has dipped about 18% from its peak last week. WDC, STX and SNDK stocks have had a similar dip, attracting investor interest.
SK Hynix Announces Wafer Capacity Tripling by 2034
South Korean memory giant SK Hynix said on Wednesday that it plans to triple its wafer capacity by 2034. Speaking to Nikkei, SK Group Chairman Chey Tae-won said the company expects its wafer capacity to double within five years and ultimately triple by around 2034 as it aggressively expands production.
Chey added that demand is growing so rapidly that some industry observers already believe even that level of expansion may not be sufficient.
Retail Sentiment Remains Mixed Across Memory Stocks
On Stocktwits, the retail sentiment was 'neutral' for MU, 'bearish' for WDC and SNDK, and 'extremely bearish' for STX. The retail sentiment for DRAM was 'neutral.'
A trader said on Stocktwits: "$DRAM the longer we are held down by macro noise, geopolitical uncertainty and an imminent overhyped SpaceX IPO, the more intense the next leg up will be. By the end of this month after MU ER, we will be cruising our way to $100+."
Micron is scheduled to report its quarterly results on June 24. Daiwa raised its price target on MU to $1,600 from $700, which implies an expectation of 80% gains from the stock's close on Wednesday. That compares to analysts' average price target of $811.23, which is 9% below the current stock level.
Micron shares are up 212% year to date. DRAM has gained about 100% since its launch on April 2.
FAQ
What caused memory chip stocks to rise in Thursday's premarket trading?
Memory chip stocks rose in Thursday's premarket trading following declines over recent sessions amid U.S.-Iran tensions. Micron stock led gains with a 3.6% increase, while the Roundhill Memory ETF (DRAM) rose 4.5%. The rebound occurred as U.S. stock futures turned higher despite Wednesday's strikes against Iran.
What did SK Hynix announce about its production capacity?
SK Hynix said on Wednesday that it plans to triple its wafer capacity by 2034. SK Group Chairman Chey Tae-won told Nikkei the company expects its wafer capacity to double within five years and ultimately triple by around 2034. He noted that demand is growing so rapidly that some industry observers believe even that level of expansion may not be sufficient.
When does Micron report its quarterly results?
Micron is scheduled to report its quarterly results on June 24. Daiwa raised its price target on MU to $1,600 from $700, which implies an expectation of 80% gains from the stock's close on Wednesday.
