Apple’s Supply Chain Woes Signal Bright Future for Micron Technology
Apple’s recent earnings call revealed more than just the tech giant’s performance; it offered a significant, albeit indirect, endorsement of Micron Technology’s (MU) potential. While Apple CEO Tim Cook didn’t explicitly mention Micron, his commentary on persistent memory chip shortages has analysts predicting a surge in value for the memory specialist.
Memory Constraints Dominate Apple’s Outlook
The word “memory” was referenced a striking 16 times during Apple’s fiscal year 2026 first-quarter earnings call, according to one analyst’s count. These weren’t nostalgic recollections, but rather discussions centered on a critical imbalance between supply and demand for memory chips. Cook stated that iPhone demand has placed Apple in “a supply chase mode” for memory, adding, “We are currently constrained, and at this point, it is difficult to predict when supply and demand will balance.”
While these supply constraints haven’t yet significantly impacted Apple’s gross margins – Cook noted a “minimal impact” in the first quarter – the company anticipates a greater effect in the coming months. Unsurprisingly, Cook acknowledged that memory prices are expected to rise “significantly” beyond the second quarter, driven by fundamental economic principles.
Micron Poised to Benefit from Apple’s Predicament
Although Micron wasn’t directly named during the earnings call, the implications are clear. Samsung and SK Hynix currently dominate Apple’s memory chip supply. However, Citigroup estimates that Micron already provides roughly 30% of the DRAM and NAND chips used in the upcoming iPhone 17, a share that is rapidly approaching those of its larger competitors (37% and 33% for Samsung and SK Hynix, respectively).
Reports from the Korea Economic Daily indicate Apple is actively attempting to secure long-term memory contracts, even dispatching purchasing teams to hotels near the Korean manufacturing facilities of Samsung and SK Hynix – a move described as “desperate” by some observers.
However, Cook hinted at Apple’s flexibility, stating the company has “different levers that we can push” to address the supply constraints. This suggests the possibility of a more favorable deal with Micron, potentially rewarding the company for its ability to deliver critical memory components.
A Severe Shortage Across the Tech Industry
Apple’s struggles highlight the severity of the memory shortage impacting the entire tech sector. If the world’s second-largest company is facing challenges securing essential chips, the difficulties for smaller firms are likely even more pronounced. This situation uniquely positions Micron, particularly given its strong position in the high-bandwidth memory (HBM) market, which is crucial for GPUs and artificial intelligence (AI) accelerators.
Undervalued Despite Strong Growth Potential
Despite its advantageous position in the burgeoning AI market, Micron’s stock appears undervalued. The company’s forward price-to-earnings ratio currently stands at just 13.1, with a price-to-earnings-to-growth (PEG) ratio of 0.73. While the stock has already experienced substantial growth – a 380% increase over the past 12 months – Wall Street analysts, on average, predict a 15% decline from its current price.
However, one analyst believes Tim Cook’s assessment of the memory market carries more weight than current Wall Street sentiment. The dynamics of the global memory market are expected to continue benefiting Micron, leading to a prediction of further stock appreciation in 2026.
