Amazon's $220 Billion Bet: Memory Demand Soars

Amazon is planning to spend $220 billion in capital expenditures this year, up from its initial projection of $200 billion. The tech giant cited memory as the key driver behind increasing its budget by $20 billion.

The demand for computing capacity is skyrocketing, and Amazon's clients are still in the early stages of deploying AI on a wide scale. This means more computing capacity will be needed, which translates into huge demand for memory chips, currently in short supply due to insufficient production levels.

Micron Technology (NASDAQ: MU) is a major player in this sector and should benefit from Amazon's increased spending. The company's stock is relatively cheap, trading at 5.3 times fiscal year 2027 earnings. Wall Street analysts estimate that Micron's revenue will increase by 85% during fiscal year 2027, with its earnings per share projected to rise from $73.43 in fiscal year 2026 to $155.56.