Micron Shares Rise Nearly 4%, $1,000 Mark Within Reach

TradingKey - Micron's stock price surged pre-market, once again nearing the $1,000 mark, primarily driven by robust capital expenditures from Tesla and Google.

During pre-market trading on July 23, Eastern Time, Micron Technology ( MU) surged nearly 4% in pre-market trading, once again approaching the $1,000 mark. Micron's stock price reached a high of $997 today and has since pulled back to $973.

Micron stock price chart, Source: TradingView

The rebound and strength in Micron's stock price was not driven by its own positive catalysts, but was instead catalyzed more by Tesla ( TSLA) and Google ( GOOG )'s capital expenditures. As one of the world's leading memory chip giants, Micron provides critical memory solutions to both Tesla and Google. For instance, Micron supplies automotive-grade DRAM and NAND Flash to Tesla, and high-bandwidth memory (HBM3e), server DDR5, and enterprise SSDs to Google.

Specifically, Tesla's CapEx exceeded $25 billion to build supercomputers and train Optimus robots. Elon Musk has publicly thanked Micron for providing high-bandwidth, high-yield memory allocations to Tesla, and has sought to purchase all the memory capacity Micron can offer. This kind of ceiling-level demand from a mega-customer has significantly driven up Micron's shipments and average selling price.

Google has significantly raised its full-year CapEx to nearly $200 billion. In addition to purchasing Nvidia GPUs, it is also heavily deploying its own self-developed TPUs. However, whether for GPUs or TPUs, the next-generation AI chips' demand for high-bandwidth memory (HBM3e / HBM4) more than doubles with each generation. As a leading supplier of HBM3e, Micron has directly captured massive orders.

Although the increase in CapEx for Tesla and Google exerts immense pressure on their shareholders and could even be considered a headwind, the opposite is true for Micron, representing a clear tailwind. Simply put, as long as tech giants continue to 'pour money into building computing power,' Micron, positioned at a critical bottleneck of the AI computing infrastructure, will continue to benefit from rising prices and volumes, margin expansion, and valuation growth. While this trend is clear, the exact order parameters Micron has received from Google and Tesla remain unknown.