Why Micron Stock Is Still Going Up
Key Points
TSMC is raising its price for contract chip manufacturing.
If TSMC feels it can raise prices safely, Micron may be able to, too.
Bank of America posits cheap Chinese AI models may require even more memory than American AI.
- 10 stocks we like better than Micron Technology ›
Micron (NASDAQ: MU) stock shot higher for a second straight day Tuesday, soaring 13.4% through 1 p.m. ET.
You can thank Taiwan Semiconductor Manufacturing Company (NYSE: TSM) for that -- and Bank of America, too.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Micron.
TSMC raises prices
Nikkei Asia reports TSMC will raise prices for contract chip manufacturing by "up to 10%" in 2027 (and some prices might spike 20%). Nikkei says TSMC is doing this to offset "rising costs for materials, manufacturing equipment and construction of new overseas chip plants."
But that's just one reason -- the other reason is that TSMC can raise prices.
Just because input prices rise doesn't mean a manufacturer can raise its product prices without losing customers. If customers balk, the manufacturer may need to absorb the higher costs of the more expensive inputs, hurting its profit margin. In light of strong demand for artificial intelligence chips, though, it seems TSMC is comfortable raising prices -- and confident its customers will not flee.
Implications for Micron
By implication -- because AI chips require lots of memory chips when performing inference functions -- this means Micron can raise its prices, too. So in essence, TSMC has reinforced the bull thesis for Micron stock today.
Separately, Bank of America analyst Vivek Arya addressed concerns that cheap AI models from China might threaten Micron's business... a theory he says is nonsense. Just because Chinese models charge lower prices than American models from Anthropic and OpenAI doesn't mean they're doing so profitably, or that their input costs are lower.
To the contrary, Arya thinks that by using fewer and lower-quality GPUs, Chinese AI companies may actually need to buy more memory chips to answer questions -- not fewer. And if he's right about that, he's just given investors yet another reason to buy Micron stock.
Should you buy stock in Micron Technology right now?
Before you buy stock in Micron Technology, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Micron Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $364,562!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,247,668!*
Now, it’s worth noting Stock Advisor’s total average return is 894% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of July 21, 2026.
Bank of America is an advertising partner of Motley Fool Money. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
Recommended Articles
