Key Highlights

● SK hynix's profit jumped more than sevenfold year over year.

● The company expects the memory shortage to last into 2030.

● Micron is the only major US-listed memory maker.

● Micron gave back some gains after hours on Alphabet's miss.

Micron Technology shares jumped on Wednesday, October 28, after South Korean rival SK hynix posted a blockbuster quarter and forecast a memory shortage lasting years.

Micron Technology (NASDAQ:MU) jumped during Wednesday's regular session as investors read blowout results from South Korean rival SK hynix (NASDAQ:SKHY) as a strong signal for the entire memory-chip industry. Micron was one of the standout gainers on the Nasdaq-100, which rose 161.72 points to close at 29,813.16.

The SK Hynix Numbers

SK hynix reported a more than sevenfold jump in profit for the quarter. Revenue soared to about $78.7 billion, its first quarter above 100 trillion won, and operating profit reached about $62.7 billion, an extraordinarily high margin for a chipmaker. The company also announced a shareholder return plan of about 100 trillion won.

Most important for Micron, SK hynix said it expects the memory shortage to last into 2030. That outlook suggests demand for memory, especially the high-bandwidth memory used in AI processors, will keep outstripping supply for years, supporting prices across the industry. SK hynix's US-listed shares soared on the news, and South Korea's KOSPI index surged.

Why It Matters for Micron

Micron, SK hynix and Samsung dominate the global market for DRAM memory, and together they supply the high-bandwidth memory stacked alongside AI accelerators from Nvidia (NASDAQ:NVDA) and others. When one of the big three reports surging profits and a prolonged shortage, investors tend to assume the others are seeing similar conditions.

Micron is the only one of the three based in the US, making it the most direct way for many American investors to bet on the memory cycle. Other memory and storage names also climbed on Wednesday, including Sandisk (NASDAQ:SNDK) and Seagate (NASDAQ:STX). The gains spread across the semiconductor sector: chip-equipment makers Lam Research (NASDAQ:LRCX) and Applied Materials (NASDAQ:AMAT) rallied, and Arm (NASDAQ:ARM), AMD (NASDAQ:AMD) and Marvell (NASDAQ:MRVL) also rose.

After-Hours Reversal

Micron's gains faced pressure after the closing bell. Alphabet (NASDAQ:GOOGL) slid sharply in extended trading after missing estimates and reporting negative free cash flow, and Micron slipped after hours in sympathy, giving back part of its session gain. Nasdaq-100 futures dipped overnight. Microsoft (NASDAQ:MSFT), by contrast, rose after the bell as its Azure cloud business accelerated.

Not everyone is convinced the AI spending boom will last indefinitely. BCA Research's Peter Berezin said he thinks the market is heading for an AI capex bust, though probably not until 2028.

What to Watch

The Nasdaq Composite rose 72.04 points to 26,549.85, and the S&P 500 added 21.38 points to 7,743.98 for a third straight gain. The Federal Reserve left its benchmark rate range unchanged in a 10-2 vote, and long-dated Treasury yields climbed.

The big question at Thursday's open is whether Micron can hold its session gains after its after-hours slip. Amazon (NASDAQ:AMZN) reports after the close, while Apple (NASDAQ:AAPL) and Meta (NASDAQ:META) report later this week, and their spending plans on AI infrastructure could determine whether the memory rally has more room to run.