Nvidia's AI Supply Commitments May Signal End to Easy Money for Micron

Micron Technology's stock has skyrocketed over 200% this year due to AI memory demand, but Nvidia's latest filing may indicate when the easy money runs out. According to Nvidia's disclosure, it has secured $279 billion in supply and capacity commitments as of July 26, primarily for memory and manufacturing capacity.

This number is up from $119 billion a quarter earlier and includes $92 billion for fiscal year 2027, $87 billion for fiscal year 2028, and $88 billion for fiscal year 2029. Analysts note that this shows how aggressively AI companies are locking in scarce capacity.

D.A. Davidson analyst Gil Luria stated that Nvidia is absorbing part of the increase in memory costs because passing the full increase to customers would make pricing too high. This suggests that suppliers have significant leverage, even over major buyers like Nvidia.

For Micron, this scarcity has translated into rising prices, exceptional margins, and longer-term customer commitments. However, analysts predict that today's rate of memory-price inflation may not last, with UBS analyst Timothy Arcuri expecting some easing of pricing environment by 2027.