Memory-chip stocks surge amid data center investment

What happened: Memory-chip stocks surged on Monday, marking the fifth consecutive daily gain. Key players like Micron Technology (MU), Sandisk (SNDK), and SK Hynix (SKHY) led the rally. This upswing comes amidst sustained investment in data centers, particularly for artificial intelligence (AI) applications. Meanwhile, Iris Energy, an Australian Bitcoin miner, rebranded as IREN (NASDAQ: IREN) in late 2024, with its stock expected to benefit from the AI data center boom.

Market impact: The surge in memory-chip stocks buoyed the Nasdaq Composite, offsetting a decline in the Dow Jones Industrial Average. The tech-heavy index held roughly flat, while the S&P 500 slipped 0.17%. The positive sentiment around memory-chip stocks and data centers is driving investor interest, with IREN's growth potential attracting bullish sentiment despite its relatively cheap valuation.

What to watch next: Investors should monitor Micron Technology's earnings, scheduled for release on May 25, which could provide insights into the demand for memory chips. Additionally, the evolution of IREN's massive contracts and their impact on the company's stock performance will be crucial to follow. Lastly, geopolitical tensions, such as the situation in the Strait of Hormuz, could introduce volatility, affecting global markets and commodity prices.