10 Words From Apple CEO Tim Cook That Are Music to the Ears of Micron Technology Investors

Micron Technology (NASDAQ: MU) stock has been red hot over the past year amid an ongoing shortage of memory products driven by significant investments in artificial intelligence (AI). Micron's memory products play a crucial role in that build-out.

Recently, Apple CEO Tim Cook essentially confirmed that the shortage remains a problem for his company. And while that might be bad news for consumers buying Apple devices and other tech products that are becoming more expensive, that's fantastic news for Micron investors. Here's a look at what Cook said, and why it's terrific news for Micron Technology.

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Cook says the company has little choice but to raise prices

Apple is raising the prices of its products, even as its CEO says the company has been working to mitigate the higher costs it's been incurring. Cook says the situation simply isn't sustainable anymore. Specifically, in the DRAM market Micron serves, supply remains limited relative to demand. "There's less supply at a time when consumers want ‌devices."

Those 10 words are great news for Micron, underscoring the ongoing shortage of memory products. If Apple saw an end to the shortage in the near future, it's plausible that the company would have held out longer to avoid raising prices. But the fact that it's going through with them and plans to pass on higher costs to its customers may indicate that management doesn't see the shortage ending anytime soon.

For Micron, with earnings on deck, this could mean stellar third-quarter numbers and solid guidance ahead.

Is Micron's stock destined to rise higher this year?

Micron reports earnings on Wednesday, and the numbers are likely to show incredible year-over-year growth yet again. Last quarter (which ended on Feb. 26), the company's revenue rose by 196%.

But investors should be cautious with Micron, as expectations may already be high heading into the upcoming earnings report. The key will be the guidance, as that could effectively make or break the stock. A glowing forecast of much more growth ahead could pave the way for future gains in the stock, while any sign of slowing could trigger a sell-off. Given what Cook recently said, however, I don't expect it to be the latter. It'll simply be a question of whether the guidance is strong enough to convince investors that Micron is an even better buy than it already is, given its rich valuation -- its market cap is $1.3 trillion.

I think the stock will rise further this year, but it's hard to predict how much upside it has left, since so much of its valuation hinges on expectations of future growth, which can also make it a risky and volatile investment to hold. If you're not comfortable with watching the tech stock and industry conditions closely, you may want to stay on the sidelines.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Micron Technology. The Motley Fool has a disclosure policy.