Bank of America Sees Durable Chip Rally Ahead
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Bank of America Sees Durable Chip Rally Ahead Faizan Farooque Thu, June 25, 2026 at 2:47 PM EDT 1 min read MU BAC 005930.KS 000660.KS This article first appeared on GuruFocus . Micron ( NASDAQ:MU ) is becoming the clearest sign of a structural shift in chips, with Bank of America's Vivek Arya arguing that AI has permanently changed the memory cycle, according to Seeking Alpha . Arya told CNBC that there is no AI without memory, pointing to Micron's blowout results as evidence that demand is not just another cyclical upswing. He said AI-optimized memory can require 3 to 4 times the manufacturing capacity of conventional computing products, creating a supply-demand imbalance that could last at least through the end of next year. Warning! GuruFocus has detected 7 Warning Signs with MU. Is MU fairly valued? Test your thesis with our free DCF calculator. The difference this time, according to Arya, is durability. Micron has signed multi-year agreements with 16 customers, giving it better visibility on pricing, units, and supply. At the same time, Samsung, SK Hynix, and Micron appear to be showing greater pricing discipline after years of boom-and-bust cycles. Additionally, Arya said Micron's forward PE has remained essentially unchanged since the start of the year, even after the stock's rally. He noted that Nvidia, Broadcom, and Micron all trade at multiples below the S&P 500, with Micron still below 10 times forward earnings.
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