Jim Cramer Shared Why Micron Technology, Inc. (NASDAQ:MU)’s Shares Didn’t Rise On Shortage News

Memory giant Micron Technology, Inc. (NASDAQ: MU )'s shares are among the top performers in the market. They are up by 664% over the year on the back of strong demand for memory chips which has left the market reeling from a historic shortage. Cramer has been one of Micron Technology, Inc. (NASDAQ:MU)'s biggest supporters and has repeatedly praised the firm's CEO for being humble. In his morning appearance on August 28th, the CNBC TV host discussed the firm after SK hynix's CEO commented that the memory shortage could persist until 2030:

"And yet KOSPI was down last night, I was surprised, I thought that the shortage comment, that echoes what Sanjay Mehrotra told me when we were out at Micron. But I guess, that's kind of factored in. I know that it's not factored in when you're buying DRAM, you're always kind of hopeful that maybe there's going to be a price break."

Just like the Korean stock exchange KOSPI, Micron Technology, Inc. (NASDAQ:MU)'s shares remained unimpressive on Friday as they closed 0.27% lower. The firm's criticality to the AI buildout and the historical cyclicality of the semiconductor industry mean that the resilience of the demand for its products plays a key role in the narrative. However, the relatively weak share price movement led Cramer to conclude that expectations of strong demand until 2030 are priced into the stock.

On the bullish front, Micron Technology, Inc. (NASDAQ:MU)'s management has been clear in stating that its high bandwidth memory (HBM) supply is sold out for 2026 and 2027. CEO Sanjay Mehrotra also believes that his firm's HBM market share can match its DRAM market share of 20% to 25% by 2027 end. Not to mention, Micron Technology, Inc. (NASDAQ:MU) has $100 billion in contracted AI memory revenue until 2030.

Yet, at the same time, the firm's fiscal fourth quarter gross margin guidance of 86% and earnings per share guidance of $31 have generated worries of unsustainability if its rivals ramp up production to introduce pricing pressure. Additionally, risks stemming from data center buildout slowdown and Chinese firms ramping production can also generate headwinds, especially as 20% of revenue is from China.

Even though SK hynix Inc. (NASDAQ:SKHY) is a larger player in the memory market, the debate surrounding it is the same. Reports suggest that it commands a 60% share of the global HBM market and has entered into long term agreement with several hyperscalers to inject confidence into demand sustainability. Like Micron, SK hynix Inc. (NASDAQ:SKHY)'s HBM capacity is also sold out until 2027 and the firm enjoys healthy 76% gross margins. Yet, with Samsung and Chinese firms ramping up production along with a major stock price dip since the August peak, like Micron, SK hynix Inc. (NASDAQ:SKHY) also depends on the sustainability of memory chip demand.