The Story Behind the Memory Stock Boom! (It's Not Over)

**SPEAKER_1** (0:00)
So, let's talk about memory styles, but before we talk about memory, I want to show this video from Apple. Can we show this video from Apple? Wall Street Journal.
Sound, please.

**SPEAKER_2** (0:21)
No sound.

**SPEAKER_1** (0:22)
No sound on the video. This is live.

**SPEAKER_2** (0:29)
Yeah.

**SPEAKER_1** (0:29)
Okay.

**SPEAKER_2** (0:30)
Well, I'll give context while that's trying to be loaded. So it's interesting because Apple was in the news last week. Well, it was in the news in the past couple of weeks, right? Like they had their conference and people were kind of underwhelmed by it, which is rightfully so, right? When we talk about innovation and we were at it, we still don't have the path for artificial intelligence laid out for us.
And then last week, what we saw was they had made a partnership with Intel. Why is that important? Well, we know that the government obviously has made it a priority for Intel to be in the business of manufacturing GPUs, CPUs and TPUs. And so the Apple proposition, when I saw it, this is crazy. So the video we're trying to get work, I sent to Shadi on Thursday.

**SPEAKER_1** (1:19)
Yeah.

**SPEAKER_2** (1:20)
And he sent it to me today.
So I'm like, sometimes that tells you, number one, I appreciate it because that tells me that he's looking at the memory space the way I'm seeing it, but it also says like we're on the right path because not only are we seeing it, but CEOs like Tim Cook, CEOs like Jensen. I know Sanjay over at Micron is seeing it the same way. And so I sent him a picture of Neo and The Matrix. I like to use Neo and The Matrix when everything starts to become true because you're seeing life differently and we're starting to see AI differently. We're starting to see the layers. It's not just, hey, it's Nvidia and good luck with everything else. No, this needs to work in order for that to work, in order for this to work. And so the picture is becoming very clear.
And that's kind of what the video is. Hopefully we can get to it.

**SPEAKER_3** (2:14)
Apple has a problem. It's so bad that Tim Cook is calling it a 100 year flood. The price for tiny but critical components buried inside our electronics is skyrocketing, specifically memory and storage chips. And Tim Cook told me it's going to force Apple to raise prices. I spoke with the outgoing Apple CEO in an exclusive interview about the company's plan to adjust to this new reality.
Cook told me that the company's planned price increases are unavoidable. And while Apple has tried to mitigate increased costs, the situation, he said, has become unsustainable. So why is this happening now? Chips have gotten faster and cheaper every couple years, powering a new technology revolution every decade or so. But in the last few months, that magic formula has reversed. That's because the prices for memory and storage chips, which are inside virtually every computing device, have suddenly skyrocketed. Apple's latest warning is remarkable, because it's been the biggest buyer of storage since the days of the iPod, and also a giant buyer of memory. But now there's a new competitor in town, artificial intelligence. AI companies are flooding the memory and storage market with money and securing much of the supply. Suddenly, Apple no longer has the leverage to push the storage and memory makers for the lowest prices. It has to wait in line. What Cook told me on our call is that Apple has already been absorbing higher costs, but now it is swinging over to option two, price increases. Cook didn't say how much prices will increase, or when, or on what products. But to give you an idea of the scale, research from Tech Insights says the cost of memory and storage inside last year's iPhone 17 Pro was $50.
The cost for the same components in the upcoming iPhone 18 Pro around $200.
Now, the good news for Apple is that it's in a better position than less profitable companies who have little cushion to absorb the higher costs. Other companies are saying this is worse than tariffs, worse than the chip shortage during the pandemic. So this isn't just an Apple story, it's a tax on basically everything with memory and storage chips, and few consumers realize this wave is coming.

**SPEAKER_1** (4:15)
So, all right, let's put that in perspective. If you watch that video and your key takeaway was that Apple is in trouble or it's not even about Apple.

**SPEAKER_4** (4:29)
No.

**SPEAKER_1** (4:30)
The video illustrates the need for memory, the supply demand crisis that has happened, and the price increase for the memory chips specifically, which is why Apple is raising their price. Apple is not really the most important part of that story. It's the memory. So that's why these memory stocks have skyrocketed, right? Just kind of illustrates that, puts it in perspective. So when we talk about the memory stocks, and we'll talk about the memory stocks now, because that's the title that we're on right now. But we talk about the memory stocks, we talk about memory ETF, we've been talking about drama.