Memory chipmakers Micron Technology Inc. and SK hynix Inc. each saw their market values surge above $1 trillion for the first time today, driven by insatiable demand for their products from artificial intelligence firms.

Micron’s stock jumped more than 19% today, as investors piled into the stock following a report from the investment bank UBS, which tripled its price target from $535 to $1,525 per share. The report cited long-term agreement opportunities with major customers and partially fixed pricing on those deals. “We believe the market will start to put a more ‘normal’ multiple on the stock and MU will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex,” UBS said in the report.

Micron’s rising stock added to the tailwinds behind the South Korean memory maker SK hynix, whose shares gained more than 11% today.

Today’s rally extends a blistering run that has seen Micron’s stock gain just over 214% since the start of the year. The rise has been fueled by skyrocketing demand for the high-bandwidth memory and dynamic random-access memory chips that are vital components of AI servers and accelerators. SK hynix has seen even bigger gains, its stock up about 250% since the beginning of the year.

The demand for memory has led to a global shortage of the chips, and neither Micron nor SK hynix has been able to ramp up production enough to compensate. As a result, they’ve been able to hike their prices for memory, accelerating their profits and driving their stock prices to fresh heights. Another memory chip maker, Samsung Electronics Co. Ltd., also crossed the $1 trillion market capitalization mark a few weeks ago.

“AI is the new gold rush, and where before it was shovels and picks that were selling as fast as they could be made, now it’s GPUs and memory,” said Holger Mueller of Constellation Research. “That’s why Micron and SK hynix have crashed through the $1 trillion value barrier. In doing so on exactly the same day, it shows that they’re neck and neck in this race. Prudent investors would be smart to ask when the memory bonanza will end, but with AI still roaring ahead, that’s unlikely to happen this year.”

Micron had only surpassed the $700 billion market cap milestone less than a month ago, pushing it into the ranks of the most valuable U.S. technology companies. Intel Corp., which failed to capitalize on the AI boom initially, has also made strong gains this year thanks to rising demand for CPUs, and its stock is up more than sixfold this year, trading near all-time highs.

Other chipmakers, including Advanced Micro Devices Inc., Qualcomm Inc. and Marvell Technology Inc. have also achieved all-time highs in recent weeks.

Photo: Micron