Memory stocks, including Micron Technology, SK Hynix and SanDisk, rose on Tuesday as investors rotated back into semiconductor shares following the recent sell-off, even as falling crude also lifted risk appetite.
Micron MU and SK Hynix gained more than 3%, while SanDisk advanced over 5%.
The rebound came as Brent crude fell 1% at around $103 per barrel, extending losses from the previous session as investors monitored developments surrounding a possible peace agreement between the US and Iran.
US President Donald Trump said he had reached a deal with Israeli Prime Minister Benjamin Netanyahu and that Washington would stop providing military aid to Israel after the end of this year.
Apple warning reinforces memory pricing outlook
Memory stocks also received support from comments by Apple about the sharp increase in memory prices, which reinforced expectations that chipmakers could retain pricing power amid strong demand.
Apple CEO John Ternus, delivering his first earnings report since taking over the role, described the current memory-pricing environment as “unprecedented”.
The company warned that higher memory costs would put pressure on gross margins and said the increase was likely to persist beyond the December quarter.
“What we’re seeing with memory pricing right now is unprecedented,” Ternus said on the earnings call, adding that Apple was paying more than it did earlier this year.
“Looking beyond the December quarter, we see the pricing for memory purchases continuing to increase.”
While rising component costs pose a challenge for electronics manufacturers, they could benefit memory producers by supporting selling prices and margins.
Yardeni Research has also said memory manufacturers are sold out into 2029, reflecting strong demand from AI infrastructure developers and limited supply.
Analysts expect semiconductor stocks to rebound
The gains come after a brutal month for technology shares.
The biggest AI and semiconductor stocks have shed about $5 trillion in market value since October 6, according to Yahoo Finance calculations, as investors questioned the returns on heavy AI spending.
However, market veteran Ed Yardeni said the recent sell-off was not a full-blown rout but was “taking some air out of the AI bubble,” which he considers a positive development.
In an interview with CNBC-TV18, Yardeni said he expected semiconductor stocks to rebound, arguing that AI is a real technology that would eventually become profitable, even though identifying the companies best positioned to benefit remained difficult.
He added that the recent pullback had lowered valuations even as analysts continued to raise earnings expectations for AI-related companies.
Semiconductor stocks trade at a forward price-to-earnings ratio of about 13.5, below the S&P 500’s 18.5, Yardeni noted.
Strong cloud revenue growth and substantial order backlogs also support his outlook.
Micron’s earnings prospects remain particularly strong.
Analysts expect its diluted earnings per share for fiscal 2027, ending in August, to rise 136.5% to $177.03.
The company has beaten consensus earnings estimates in each of the past four quarters.
Among the 42 analysts covering Micron, the consensus rating is Strong Buy, comprising 34 Strong Buy ratings, five Moderate Buys, and three Holds.
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