The US memory chip and hardware supply chain index surged 37% in May, its best monthly gain on record, closing at 210.62 on Friday.
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Memory chip index hits record high, surges 37% in May
The US memory chip and hardware supply chain index closed at a record 210.62 on Friday, rising 1.48%, as AI-driven demand for high-bandwidth memory and data center hardware pushed the sector's monthly gain to 37.27%.
"The AI infrastructure buildout is creating sustained demand for memory and storage that we haven't seen in previous cycles," said Mark Marron, president and CEO of ePlus, a technology solutions provider that reported 22% annual net sales growth to $2.44 billion. "We are well positioned to capture market opportunity and scale growth over the long term."
The index rose 1.48% on Friday to 210.62, extending its weekly gain to 11.93% across four trading sessions. The May advance of 37.27% marks the strongest monthly performance for the index, which tracks companies across memory chip fabrication, hardware supply chain, and semiconductor equipment.
The rally reflects a market recalibrating for an AI-driven memory supercycle. Nvidia, AMD, and Micron are among the primary beneficiaries, while foundry partners TSMC and Samsung Electronics stand to gain from increased wafer starts for HBM (high-bandwidth memory) production. The question for investors is whether the 37% monthly gain has front-loaded the year's returns or signals further upside as enterprise AI deployment accelerates.
HBM Demand Drives the Cycle
High-bandwidth memory has become the bottleneck in AI server production. Nvidia's H100 and B200 GPUs require HBM3e modules, with each GPU pairing up to eight HBM stacks. SK Hynix, the market leader in HBM, has sold out its 2025 and 2026 production capacity, according to company disclosures. Micron has similarly reported that its HBM supply for 2025 is fully allocated, with pricing locked in through multi-year contracts.
The supply-demand imbalance has lifted pricing across the memory stack. DRAM spot prices have risen 15% to 20% since the start of the year, while NAND flash prices have stabilized after a prolonged downturn, according to industry data. The shift benefits not only memory manufacturers but also equipment suppliers such as Applied Materials and ASML, which provide the lithography and deposition tools needed for advanced node production.
Valuation and the Risk of Pull-Forward
At current levels, the index trades at a premium to historical averages, reflecting the market's conviction that AI-driven memory demand is structural rather than cyclical. Nvidia shares trade at roughly 35 times forward earnings, while Micron trades at about 12 times forward earnings — a discount that some analysts argue does not fully reflect the HBM opportunity.
The risk is that the 37% monthly gain has priced in multiple quarters of upside. Any slowdown in AI server shipments, a reduction in hyperscaler capital expenditure, or a shift in GPU architecture that reduces per-unit memory content could trigger a correction. For now, the data supports the bull case: hyperscaler CapEx is projected to exceed $250 billion in 2026, with a growing share allocated to memory and storage infrastructure.
This article is for informational purposes only and does not constitute investment advice.
[1] Friday (May 29), US stock memory chip and hardware supply chain index rose 1.48% to 210.62 points, continuing to hit a record closing high, up 11.93% this week (four trading days), and up 37.27% in May[2] China Stocks Rise on Semiconductor and Artificial Intelligence Rally While Hong Kong Markets Decline[3] ePlus Reports Fourth Quarter and Fiscal Year 2026 Financial Results[4] Morning Bid: Deal or No Deal[5] Korea built champions. Penang can too
