Investing Legend John Templeton Has a Warning for Micron and SK Hynix Investors
Has the memory chip industry undergone a significant change over the past few years?
Overview
Memory chipmakers have been some of the biggest winners of the artificial intelligence (AI) boom in 2026. As large language models expand, memory has proven to be one of the biggest bottlenecks in many systems, driving insatiable demand for chips to package with AI accelerators and graphics processing units (GPUs).
That spike in demand has led to a commensurate spike in pricing since it takes a long time for chipmakers to expand their manufacturing capacity. The result is record profits for the handful of companies that make memory chips, such as Micron Technology (NASDAQ: MU) and SK Hynix (NASDAQ: SKHY).
Details
Many investors have piled into these stocks on the belief that the current AI build-out is far from peaking. What's more, there's growing sentiment that the sharp earnings cycles that have plagued the industry for decades could be a thing of the past due to the structural demands of AI. As a result, investors should be willing to pay a higher price for the memory chipmakers' earnings today.
Source
Originally published at www.fool.com.