2 weeks ago
AI Stocks Rebound as Memory Chip Demand Drives Global Rally
Some companies make special computer parts called chips that help computers think.
For two months, the money value of these companies went down.
People were worried that prices were too high and that AI might not be worth all the money.
Now, those companies are doing well again, and their stocks are going up.
Stock markets in Japan and South Korea had very big gains.
A very famous inventor named Elon Musk said something that made people feel more confident about AI.
He agreed that computer memory will be very important as AI gets smarter.
Companies that make memory chips are selling lots of them.
The leader of a big chip company thinks there won't be enough chips for a very long time.
Big companies like Microsoft and Amazon are spending huge amounts of money to build giant computer buildings.
Some people still worry that this could be a bubble that might pop.
AI-related stocks rebounded in global markets after two months of losses driven by US inflation worries and fears of an AI bubble.
Japan's Nikkei 225 advanced 4.7% for the week, while South Korea's KOSPI jumped 22% in 10 days on the AI chip rally.
Elon Musk replied "Few realize this" to a post arguing that memory, not compute, is the rate limiter of the Agentic Era.
Memory chip makers SanDisk, SK Hynix, Samsung and Micron led the rally, with SK Hynix's CEO saying the shortage could extend beyond 2030.
Oracle, Microsoft, Meta, Amazon and Alphabet have added nearly $350 billion in cumulative debt to fund AI data centre hardware.
- Who
- Investors, memory chip makers (SK Hynix, Samsung, Micron, SanDisk) and tech leaders including Elon Musk and SK Hynix CEO Kwak Noh-Jung.
- What
- AI-related stocks rebounded in global markets, led by memory chip producers, after two months of steep declines.
- Where
- Global stock markets, notably Japan (Nikkei 225, Topix) and South Korea (KOSPI).
- When
- The rally was reported on a Friday, following losses since July.
- Why
- Exploding demand for memory chips driven by AI and "agentic" AI, combined with limited supply capacity, boosted investor confidence.
Skeptics
Optimists
AI bubble risk
Skeptics
Major tech earnings showed massive AI budgets with uncertain outcomes, refuelling concerns about overspending and a market bubble after two months of losses.
Optimists
Huge amounts of hyperscaler money flowing into hardware are translating into strong sales and profit growth, and memory demand has exploded while supply capacity is limited.
Rally sustainability
Skeptics
The rebound follows steep losses since July driven by US inflation worries and AI bubble fears, and the world will not build data centres at this speed forever.
Optimists
Record weekly gains, customers seeking long-term supply agreements, and trillions of dollars in data centre investment suggest the shortage and rally will persist, possibly beyond 2030.
Key facts
- Nikkei 225 weekly gain
- 4.7%
- KOSPI 10-day gain
- 22%
- AI hardware debt (Oracle, Microsoft, Meta, Amazon, Alphabet)
- Nearly $350 billion
- Memory chip makers leading rally
- SanDisk, SK Hynix, Samsung, Micron
- SK Hynix CEO
- Kwak Noh-Jung
- Expected chip shortage duration
- Likely beyond 2030
- Musk's reply on memory demand
- "Few realize this"
- Report source
- Bloomberg
Quotes
Hitoshi Asaoka
Chief strategist, Asset Management One
“"A huge amount of hyperscaler money is flowing into hardware. That is translating into extremely strong sales and profit growth for hardware companies."”
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SK Hynix CEO Kwak Noh-Jung
CEO of SK Hynix
“"The AI boom has redefined the memory chip business for good."”
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Peter Diamandis
Entrepreneur and founder of X PRIZE Foundation
“"Memory, not compute, is the rate limiter of the Agentic Era."”
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