Memory Stocks Surge, Driven by Interest Rate Cut Expectations and Increased AI Demand

The memory stock market has recently shown a sharp uptrend. Micron rose by 6%, SK Hynix ADR by 8%, and SanDisk by a remarkable 16%. The movement of these memory stocks has become one of the main topics of market interest.

The US Producer Price Index (PPI) was released, and it did not increase, falling below the forecast of a 0.2% rise. This is a much lower figure than predicted. Simultaneously, US initial jobless claims also came in higher than expected, signaling a slowdown in the labor market.

With the Producer Price Index coming in lower than expected, the view that interest rate hikes are less necessary has formed. Also, the increase in new jobless claims indicates a worse-than-expected employment situation, which also leads to the argument that there is no need to rush interest rate hikes.

These macroeconomic indicators led to a decline in US bond yields. Typically, lower bond yields benefit Nasdaq the most, and on this day, among Nasdaq sectors, memory stocks, which are most closely tied to US bond yields, rose the most.

The biggest problem with the fundamentals of memory semiconductors currently is that despite the importance of AI, big tech companies lack the funds for capital expenditure (CAPEX). They are experiencing difficulties in raising funds needed to build data centers.

The scale of corporate bonds issued by big tech companies is so massive that it distorts the entire corporate bond market, leading to a shortage of funds in the market. As a result, big tech companies must issue bonds to fund capital investments, making the market highly sensitive to interest rate fluctuations.

The market has recently been paying attention to the movements in the credit default swap (CDS) premiums of Nvidia and big tech companies. The CDS premium is an indicator that reflects the market price of a company's probability of bankruptcy, and after rising for a while, it has recently slightly declined. This rise in CDS premiums reflected market concerns about the financial health of big tech and was a factor in the decline of memory stock prices.

Recently, market trends have begun to shift. With both the Consumer Price Index (CPI) and Producer Price Index (PPI) showing stability, concerns about inflation have eased. This acted as a positive signal for interest rate stability. Additionally, Nvidia CEO Jensen Huang's plan to invest $500 million became known to the market, ushering in a new phase.

Jensen Huang's plan was to attract external funds to purchase Nvidia GPUs. By engaging asset management firms and encouraging their funds to buy Nvidia GPUs, they successfully secured a new source of funding. This helped alleviate some concerns about a shortage of capital.

During the recent earnings season, AI-related companies consistently reported strong results. Nevius and CoreWeave, which primarily focus on GPU-related cloud businesses, showed good performance, and AI server providers Dell and Lenovo also recorded strong earnings. These results demonstrate robust growth across the AI industry.

A notable point from Nevius's earnings announcement is that AI cloud demand is exploding, leading to contracts being finalized at even higher prices. Nevius stated that its annual revenue per 1MW was $12 million at the beginning of 2026, but short-term contracts as of Q3 exceeded $40 million. This is more than three times the price from the beginning of the year, with Nevius proving the strength of AI demand through short-term contract price increases.

News has spread that AI development company Anthropic is planning to go public around October. According to the Financial Times, Anthropic's valuation is expected to reach an astounding $2 trillion upon listing. This figure reflects high expectations for the AI industry.

Anthropic's annualized revenue (AR) has increased more than tenfold since the beginning of this year. Revenue that was $100 million has surged to $120 billion. This explosive growth in revenue demonstrates Anthropic's momentum and the commercial value of AI technology.

Wells Fargo conducted a survey of Chief Information Officers at companies adopting AI. The survey results showed that responding companies currently use Anthropic models the most. Furthermore, 47% of respondents named Anthropic as the model they intend to use most in the future, indicating a high preference.

Anthropic's aggressive efforts to secure computing resources ahead of its IPO could lead to higher prices being paid for limited computing resources. This has the potential to cause a short-term increase in GPU rental prices.

DeepSeek Flagship, a Chinese AI model that adhered to a low-price strategy, announced a fourfold price increase. This indicates that a premium strategy is emerging in the Chinese AI model market as well. This was also mentioned as an example of strong demand in the AI market.

With SK Hynix ADR rising by 8% and KOSPI night futures also up by 2.61%, a strong performance for KOSPI semiconductor stocks is expected tomorrow. The recent stabilization of the Korean stock market's volatility has created a favorable environment for foreign investor inflow. Indeed, foreign investor demand has been consistently flowing in with every stock price increase, leading to a positive outlook.

SanDisk's stock price surged by 15% after announcing that it would return 100% of its free cash flow to shareholders. This is a very bold shareholder return policy, demonstrating the company's strong commitment to enhancing shareholder value. SanDisk's announcement was positively received by the market and contributed significantly to the stock price increase.