Micron stock jumps on chip production for Nvidia GPUs

Shares of Micron Technology (MU) rose Monday afternoon following the company's announcement that it will increase production of its HBM3E (High Bandwidth Memory 3E) chips. These chips will be used in Nvidia's (NVDA) semiconductors designed for artificial intelligence capabilities.

Micron expects to begin shipments of these high-performance memory chips in the second quarter of 2024. Yahoo Finance's Julie Hyman and Josh Lipton break down the details of this trending ticker.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video transcript

JULIE HYMAN: But let's talk about another big tech stock, Micron, because those shares are higher today. The chip maker announcing it's begun volume production of its high bandwidth memory 3E solution. What is that? Well, it's going to be part of NVIDIA's core GPU. And Micron says these are going to begin shipping in the second quarter of this year. Now micron is a memory chip maker, which traditionally is seen as more of a commodity product.

And I think there were some questions among investors about what role the memory chip makers were going to play. So this is a concrete example of what micron is going to be doing here. SK Hynix which is its major competitor in this area has been something that investors have been watching too. So obviously, investors like the news that Micron's participating here.

JOSH LIPTON: I feel like every show when you talk about NVIDIA, so this is the way we're doing it today. Micron saying, by the way, more is going to be revealed about its product pipeline at NVIDIA's GTC developer conference next month, which has become the big AI show, frankly. And remember, on their last earnings call in December, they did talk about how GenAI would drive what they called a multiyear growth phase for the company. Would lead to a record revenue for the memory industry market in 2025.

So they have been sounding confident and investors have been feeling confident. You look at stock, it's up nearly 60% here now in the past 12 months.

JULIE HYMAN: Yes, indeed.