CNBC’s Kristina Partsinevelos reports on Micron's margin boom.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

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Micron shares experienced a significant increase after the company reported strong earnings, driven by tight supply and robust demand for advanced memory chips used in artificial intelligence. The company’s advanced memory production is sold out through 2026, with memory prices rising 20% quarter over quarter and storage chip prices also climbing.

These higher costs are impacting major technology firms and server manufacturers, who are passing the increases along the supply chain. As a result, consumers may face higher prices for laptops and smartphones, while companies like Broadcom are seeing margin compression. The ongoing surge in memory costs raises questions about the sustainability of infrastructure buildouts and profitability across the industry.

Micron surges on soaring AI memory demand

Let's begin though with this morning's big AI mover and that's Micron surging on the heels of earnings. How is the company's margin boom impacting some other players in the space. For that we'll turn to Christina parts Neville's. Hi Christina. Hi Carl. Well Micron like you said delivered a massive B in the stock is up dramatically because supply is getting tighter. The company's advanced memory production for AI is just completely sold out through all of 2026. Memory pricing jumped 20 percent quarter over quarter and storage chips were up mid teens. And the CFO said he expects margins and performance to continue improving through fiscal 2026. But he also noted the rate of pricing increases will slow beyond February. That matters because memory is cyclical. Prices surge during shortages and then crash when supply catches up. Investors can't necessarily value Micron and peak earnings alone because downturns are inevitable with the stock up 199 percent this year alone. Has it already priced in the best case scenario. And what's more pressing to your point is who's paying for Micron's near 70 percent gross margins. Hyperscalers like Amazon Microsoft Google need these chips to build out a data centers which means higher costs for them. Server makers like Dell Lenovo HP are absorbing higher costs and passing them along. HPE raised server prices 15 percent in November. Dell follows this month with roughly 15 to 20 percent increase which means you know more expensive laptops and cell phones for you and I. Even Broadcom is feeling the squeeze with memory costs compressing their gross margins by roughly 100 basis points. And that contributed to the 11 percent sell off that we saw last week post their earnings. The question though is whether these rising memory costs start slowing the infrastructure build out or create margin pressure just across the entire supply chain.

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Micron surges on soaring AI memory demand

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