Why Nvidia probably just lit a new fire under these once-hot trades

Why Nvidia probably just lit a new fire under these once-hot trades

Brian Sozzi · Executive Editor

Thu, August 27, 2026 at 4:18 PM GMT+3 2 min read

The red-hot memory chip rally may be back on thanks to Nvidia (NVDA).

"So the price increases [on memory chips] are astronomical. In some cases, you have secured, we call it capacity, but you actually don't know how many you're getting, and at what price," Nvidia CFO Colette Kress told Yahoo Finance moments after the tech giant's earnings call on Thursday.

The memory chip market has tightened considerably as demand for high-bandwidth memory (HBM) and advanced dynamic random-access memory (DRAM) used in AI servers continues to outpace supply.

Companies such as SK Hynix (SKHY), Samsung Electronics (005930.KS), and Micron (MU) have largely sold out their premium AI memory capacity through much of 2026 as customers, including Nvidia (NVDA), Microsoft (MSFT), Amazon (AMZN), and Meta (META), race to build AI infrastructure.

The shortage has pushed memory prices sharply higher and given suppliers greater pricing power after several years of weak industry conditions. Experts expect memory supply to remain constrained into 2027, creating a favorable backdrop for the industry's largest producers.

"Higher memory total addressable market driven by both pricing and volume, S-D shortage continues for the next two years," JPMorgan strategist Jay Kwon wrote in a recent note. "Memory demand broadening out from GPU to CPU appears to have been underestimated by investors (conceptually well known but actual S-D impact underlooked) and remains a key source of potential upward revisions to demand."

The supply-demand imbalance had pushed the stock prices of Sandisk, Micron, and other players in the chip space to record highs in late June. Since then, however, the pullbacks in the space have been enormous due to fears of Big Tech overspending on AI.

Shares prices have begun to stabilize of late, however, and could continue to do so based on the bullish tone from Nvidia. JPMorgan's Kwon believes the bottom has been set in memory stocks for the year.

"We're all in the same place in terms of grinding to try and get the supply that we need. So, will it improve? We continue to help them [memory chip players]," Kress added.

Brian Sozzi is Yahoo Finance's Executive Editor, host of the 'Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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