Micron Technology and SanDisk stocks rose in premarket trading on Tuesday, resisting a hostile backdrop for technology stocks as Treasury yields hovered near their highest level in almost two decades.
Micron was up about 1.8% before the bell, while SanDisk gained roughly 1.0%.
The resilience comes despite the US 10-year Treasury yield approaching 5.27%, Brent crude around $106 and markets assigning a 72% probability to another Fed increase in October.
Memory fundamentals remain strong, but the bond market is making it harder for investors to ignore valuation risk.
Memory shortages are giving Micron protection
Micron can trade differently from a growth stock because analysts are still raising the earnings assumptions underneath its valuation.
Baird analyst Tristan Gerra raised his Micron price target to $1,520 from $1,280 on Monday and maintained an Outperform rating.
He said he had become “incrementally positive” as agentic-AI demand increases while industry memory-supply growth slows.
“Acute shortages are expected to persist in 2027,” Gerra wrote.
Baird expects total DRAM supply growth to slow to about 20% next year, while HBM supply growth remains near 60%.
The firm also expects DRAM contract prices to rise another 10% sequentially in the fourth quarter and sees HBM gross margins at Micron and SK Hynix exceeding 80% in 2027.
Rising yields normally reduce the multiple investors will pay for future profits. However, Micron still has the other side of that equation working in its favour as profit expectations move higher.
SanDisk is becoming an AI infrastructure trade
SanDisk has a similar tailwind, although its extraordinary 2026 rally makes the valuation debate more sensitive.
Rosenblatt analyst Kevin Cassidy argues that AI is changing the role of NAND flash.
In comments reported by MarketWatch, Cassidy described NAND as becoming a “system-critical component of AI infrastructure” as data-centre workloads place greater importance on performance, endurance, predictable supply and high-capacity storage.
Rosenblatt initiated SanDisk with a Buy rating and a $2,400 target. Cassidy also highlighted multiyear customer agreements covering future output, which could make revenue and supply visibility stronger than in past NAND cycles.
The shift matters because investors have traditionally treated NAND producers as cyclical businesses whose profits rise and fall with commodity pricing.
AI could weaken that framework. But it also creates a risk. If investors increasingly value SanDisk as strategic AI infrastructure, they are also embedding far more future growth into the share price.
That makes a 5.27% Treasury yield increasingly difficult to dismiss.
Memory boom now has to outrun the bond market
Macro pressure is becoming harder to ignore as memory shares hold up.
Jefferies economist Mohit Kumar told The Wall Street Journal that markets are in a “one factor world right now, with oil prices impacting rates and rates being the main driver of all asset classes.”
The chain is straightforward, as higher oil prices lift inflation concerns, which increase expectations for tighter Federal Reserve policy. That pushes Treasury yields higher and reduces the valuation investors assign to future earnings.
The 10-year yield approached 5.27% on Tuesday, its highest since 2007, while Brent traded around $106 and markets priced a 72% chance of an October Fed increase.
Micron and SanDisk are therefore caught between two powerful forces.
Memory scarcity is pushing expected profits higher, while the bond market is pushing the multiple investors will pay for those profits lower.
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