We've had a hard time keeping up with the price movements today, but suffice it to say that memory stocks are surging again. The rally in these stocks has gotten so large lately that they're starting to crowd Nvidia (NVDA) out of the AI winner spotlight. Any mention of AI related to the stock market almost instinctively causes investors to think of NVDA, but when it comes to performance since the launch of ChatGPT, memory stocks, including Micron (MU) and Western Digital (WDC), have caught up.
As of Friday morning, MU's gain of 1,127% since the launch of ChatGPT isn't far behind NVDA's 1,180% gain, while WDC's gain of 1,212% now surpasses NVDA!
Ever since the AI boom started, NVDA had built a moat comprised of the best GPUs and its CUDA software ecosystem. Memory, meanwhile, was the most commoditized aspect of the entire tech ecosystem. Try telling that to the memory companies now!
The magnitude of the moves in the memory stocks has been even more surprising. Back in early 2024, when NVDA was sitting on year/year gains of more than 300%, investors couldn't believe it. Today, stocks like MU and WDC have experienced y/y gains of triple that or more! A key difference between these rallies in the memory stocks and NVDA is that NVDA surged more than 200% on a y/y basis and continued to build on gains of that magnitude for more than a year. At this point, the rally in memory stocks has been more of a concentrated flash (pun intended) in the pan move than an enduring rally. Can it continue? Most investors would probably say no. Once supply catches up to demand, prices will come down quickly, but when was the last time the market didn't surprise you?
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