Is the Memory Supercycle Peak Near for Micron and SK Hynix?
DRAM memory cycles typically peak in a year or two.
Overview
Memory prices have been exploding higher over the past year, and with it so have the stocks of DRAM (dynamic random access memory) makers Micron Technology (NASDAQ: MU) and SK Hynix (NASDAQ: SKHY). However, the memory market is notoriously cyclical, and many investors are already questioning how long the good times will last for these AI stocks.
The typical memory cycle tracks a pattern of booming prices, followed by customers over-ordering, manufacturers increasing capacity, and then prices collapsing. The up cycle generally lasts a year or two, with DRAM makers seeing surging revenue and ballooning gross margins, followed by steep revenue and margin declines as new capacity floods the market.
Image source: The Motley Fool.
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Originally published at www.fool.com.