Shares of memory-chip makers Micron Technology, SK Hynix and SanDisk rose on Tuesday as optimism around artificial intelligence spending outweighed pressure from elevated oil prices and government bond yields.
The gains came as investors digested reports that Anthropic, one of the most closely watched AI companies, is preparing for a potential public debut that could value the company at more than $2 trillion.
Reuters reported that Anthropic is also planning to spend as much as $518 billion on cloud, computing and infrastructure, potentially creating another major source of demand for semiconductor and memory suppliers.
Anthropic spent $7.33 billion on compute and infrastructure last year, roughly three times its spending in 2024 and more than half of its $12.65 billion in total operating expenses, Reuters reported.
Micron stock MU was up by about 2%, while SK Hynix gained about 3%. SanDisk was up about 1%.
Meanwhile, the benchmark 10-year Treasury note yield was up 2 basis points at 5.264%, while the 30-year yield was little changed at 5.589%.
Falling oil prices provided some relief. Brent crude declined more than 1% to around $103.97 a barrel, while West Texas Intermediate fell 1.7% to $90.99.
The Philadelphia Semiconductor Index rose more than 2% on Tuesday, outperforming the broader market.
The S&P 500 was little changed, while the Nasdaq Composite was up about 0.2%.
Micron heads into earnings with memory market still tight
Micron is also benefiting from a separate catalyst as investors position for its fiscal fourth-quarter earnings report on Wednesday.
JPMorgan reiterated its ‘Overweight’ rating on Micron and a $1,540 price target in a note cited by TheFly.
The target implies upside of more than 46% from Monday’s closing price.
The bank said there are “multiple beat-and-raise levers still in play” for Micron.
JPMorgan said the memory market remains structurally tight across both DRAM and NAND, creating potential for Micron to outperform expectations on revenue, gross margins and earnings.
Pricing trends are another area investors are likely to scrutinize.
Micron management had previously warned of a “meaningful moderation in the rate of price increases,” but JPMorgan said pricing held up through the quarter.
That resilience could be particularly important for investors after a sharp run-up in Micron shares this year.
Wednesday’s results and management commentary will offer an indication of whether current pricing strength can continue into the next quarter.
Morgan Stanley also maintained an ‘Overweight’ rating and $1,200 price target in an earnings preview published Monday.
The firm said near-term conditions are “still very good,” supported by strong demand and rising pricing.
Morgan Stanley expects earnings estimates to rise after the results, although “less so than prior quarters.”
The firm said the bigger issue for investors is the duration of the current memory cycle.
“Duration debates take longer to pay off, as there’s no real way to prove that near term,” the firm said.
Baird was also constructive, raising its price target on Micron to $1,520 from $1,280 while reiterating its outperform rating.
Baird analyst Tristan Gerra said the firm was “incrementally positive on Micron near- and medium term,” citing increasing demand for agentic AI, slower expected DRAM supply growth across the industry in 2027 and a higher-margin outlook for high-bandwidth memory next year.
Anthropic deal adds to Micron’s AI exposure
The latest enthusiasm around Anthropic is particularly relevant for Micron because the two companies already have a commercial relationship.
Earlier this year, Micron said it had signed an agreement with Anthropic that includes the supply of memory and storage products, as well as a strategic investment in the AI company’s latest funding round.
Industry expectations point to constrained memory supply continuing into 2027, providing a potentially supportive environment for major producers such as Micron and SanDisk.
“Memory is a critical piece to delivering AI models, and that is unlikely to change,” Micron super bull Gill Luria at D.A. Davidson wrote in a note on Monday.
“More memory means better models, more memory means faster inference, and more memory means longer context windows. Market participants across the board have been consistently indicating they do not have nearly the amount of memory they need. Demand is still surging and supply at least a year away.”
Luria also pointed to the growing popularity of Meta’s Muse AI product as evidence that new consumer-facing AI applications could create additional computing demand.
Investors await Micron’s capital-return plans
Beyond quarterly earnings, investors could be looking for indications of a potentially significant change in Micron’s capital-return strategy.
JPMorgan analyst Harlan Sur said investors should listen for a possible surprise from Micron executives involving a major new capital-return programme, which could include share buybacks or a higher dividend.
“The more meaningful development we expect from the print is on the [strategic customer agreements] SCA and capital return fronts — we think the market under-appreciates the pace at which SCA coverage is compounding, and our base case is that forward bit production coverage now likely sits in the 35%+ range (up from ~20%/~33% of DRAM/NAND volumes disclosed on the last call), with strong potential that coverage is already tracking in the 50%+ range,” Sur wrote in a preview note.
Expert view
Layered on top, the 12/9/26 second anniversary of MU's CHIPS Act definitive agreements represents a key structural inflexion — post that date, management is committed to returning 100% of excess cash to shareholders (buybacks the primary vehicle), and we would expect more clarity on the timing, cadence, and initial sizing of the capital return program, in our view a substantial value-unlock lever that has yet to be fully priced in
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