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IBM and Micron stocks saw substantial pre-market increases on Thursday, June 25. IBM saw prices rise 6% before trading opened, after it announced it had broken the 1-nanometer chip barrier. 

The increase went some way to recovering the 11% year-to-date decline experienced by the company. 

Meanwhile, Micron enjoyed even better pre-trading performance, with the stock rising 18% a day after announcing its revenue had quadrupled compared to the previous year. Micron’s price has increased more than 250% since the start of the year. 

Micron is a semiconductor manufacturer that produces chips for DRAM, flash memory, and solid-state drives. Its products are used in automobile manufacturing, data centres, and computing – all of which continue to drive high demand for memory. 

A global semiconductor shortage has been evident since early 2020. The industry has failed to catch up with supply disruptions caused by the 2020 lockdowns, and the shortage has been exacerbated by the start of the AI supercycle. 

Increased Memory Demands

At the same time, business and consumer demands for memory and processors continue unabated. Streaming demands are overtaking download demands, but both have high memory requirements. 

Online gaming is also becoming more popular with all age groups. And consumers have increasingly high technology demands. For example, online casino games and slot games UK are becoming more graphics-intensive, while live casino games offer greater immersion. But technologies like this add to memory requirements. 

Micron Outperforms Expectations

Micron is one of the “big three” RAM producers, along with Samsung and SK Hynix. The US-based company produces approximately 20% of DRAM on the market, so its performance is heavily linked to RAM demand. 

Five years ago, Micron stock (MU) was priced at around 75%. Today, it has pushed over $1,250 per share. Earlier this week, there were some market concerns regarding tech stocks, especially those closely tied to AI development. 

Many analysts decried AI stock as being overbought and were concerned that companies had overstretched themselves in AI investment. 

However, Micron’s financial report helped dispel concerns regarding its stock. The company reported $42bn a year revenue, up from $9 in the previous year. Importantly, the figure outstripped analyst expectations of $36bn a year, and Micron backed this up by forecasting $50bn of revenue for the current quarter. 

Micron’s increase in stock price has seen the company’s valuation rocket above $1tn to $1.2tn. It is now 1 of 14 companies with a $1tn valuation. 

IBM Gives A Further Boost To The Tech Sector

The technology sector enjoyed an additional boost, thanks to IBM. IBM unveiled new chip technology that features 0.7nm transistors. Importantly, this means it is able to produce sub-1-nanometer architecture. It has become the first commercial company to claim the capability. 

The new design means IBM will be able to fit 100 billion transistors into a chip smaller than a stamp. 

The announcement led to a 6% increase in prices in premarket trading. While the news is exciting the technology manufacturing industry, IBM has said it could take as long as five years before the new tech goes into production, and it has not yet named a manufacturing partner.