Micron’s stock is on the rise. Even Apple isn’t safe from ballooning memory-chip costs.
1 min read
The story
A MarketWatch-cited analyst argues that DRAM and NAND supply additions will lag robust AI and consumer demand, sustaining elevated memory pricing through the near term. Micron's FY2025 results back that thesis: revenue of $37.4B (+48.9% YoY), 39.8% gross margins, and $7.59 diluted EPS reflect a pricing cycle that is still running hot rather than rolling over.
The second-order setup is a pair tension between MU (pricing power beneficiary) and AAPL (cost-inflation risk) — Apple's 46.9% gross margin is best-in-class but memory is a meaningful BOM input for iPhone and Mac. Watch AAPL's next earnings for any gross margin guidance haircut, and watch MU for signs that capacity additions are accelerating faster than the analyst expects, which would be the main catalyst to flip this narrative.
The case — both sides
MU's 48.9% revenue growth and nearly 40% gross margins, sustained into a period of rising AI-driven HBM demand, support further earnings estimate revisions higher that the current price may not fully reflect.
Memory cycles are notoriously mean-reverting, and the analyst warning itself signals the market is already aware of the supply/demand imbalance — much of MU's upcycle may already be priced in after a strong FY2025 print.
The house read
Leans bullMU's sustained pricing power and AAPL's exposure as a large memory buyer frame the question of whether the memory upcycle lifts MU further while compressing Apple's hardware margins.
Wrong ifA faster-than-expected ramp in HBM or commodity DRAM supply — or a macro demand air pocket in AI capex — would flip memory pricing and collapse the MU leg while potentially relieving AAPL's cost pressure simultaneously, killing both sides of the pair.
Published read · research, not advice