Memory Lane

For those less familiar, Micron is a major memory-centric semiconductor supplier to clients ranging from data centers to computer manufacturers to gaming consoles. To provide some context on how much AI has driven growth for Micron and its peers, just two years ago, Micron earned 71 cents per share for the full year. For its 2026 fiscal year, consensus estimates expect Micron to earn over 71 dollars per share — or literally 100 times what they earned for all of 2024. In its conference call earlier this week, CEO Sanjay Mehrotra noted “we expect tight conditions to persist beyond calendar 2027 as a result of AI-driven demand across all segments coupled with structural supply constraints.”¹ He added, “even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand.”²

Our framework for assessing AI’s forward path remains centered on the supply/demand trends across the various AI ecosystem layers. Memory plays an important role as a significant input, and like any supply-constrained item, despite a favorable near-term backdrop, investors must weigh risks. While we still view AI diffusion as an ongoing phenomenon, potential demand overextrapolation, new supply or emerging alternative technologies bear watching. 

Tech insiders have dubbed the current shortage of Random Access Memory (RAM) and Dynamic Random Access Memory (DRAM) inputs “RAMaggedon” and some have referred to the current environment as “the 2026 memory crisis.” ³ Select memory inputs have risen between 80-95% quarter-over-quarter in the first half of this year, with many analysts forecasting even higher jumps.⁴ And companies are facing important decisions when weighing how much of a cost increase they push through to customers versus absorb themselves.

Apple’s announced hardware price increases were somewhat anticipated by investors, but some anticipated relief in lower-priced items. However, Macs, iPads, HomePods, Apple TV and Vision Pro devices all saw price hikes. In its press release, Apple noted that it has “never seen a component price increase this much, this quickly. We have shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products.”⁵

Apple is not alone in these price hikes. In fact, just hours following Apple’s announcement, Microsoft released price increases for its Xbox gaming console. Effective August 1, Xbox prices will increase by at least $100, with more advanced models seeing even greater price increases. These increases represent the second price hike in less than a year from Microsoft on these products. ⁶ Apple may have cleared the way for others to follow, and regardless of how deeply installed a userbase may be, how consumers respond to cumulative price increases will shape forward outcomes.

While crude oil prices have tumbled in recent days, thanks to the Strait of Hormuz’s tentative opening, crude oil is among the most portable major energy source across the energy complex. Even Dated Brent crude, which represents crude oil sourced from the North Sea, is hovering just above pre-conflict levels. However, other energy sources, especially those more challenging to ship, face ongoing constraints.

U.S. natural gas prices, as represented by New York Mercantile Exchange futures, are 15% above prices from the conflict’s eve. Natural gas from regions with more limited supply, including Britain and Germany, are a full 25% higher than where they stood in early February. A combination of scarcity along with refinery, transportation and storage challenges likely leave select war premia in place.

The Bank of England and the European Central Bank reiterated energy price uncertainty weighing on businesses and consumers in their recent communiques.⁸ As we have shared, nuclear negotiations remain unresolved, and while progress on shipping channels is welcomed, we will continue to evaluate regional considerations in addition to broader measures to gauge progress. 

As the old saying goes, the most important voter in any election is the bond market, as capital markets remain unbiased and seek to maximize positive outcomes while minimizing risks. As USPollingData highlights, the 2026 midterm elections represent significant potential change as all 435 House of Representative seats, 34 Senate seats and 36 governorships are on the ballot.⁹ A series of Supreme Court and election law shifts have opened the door to redistricting by states, including potential reshaping closer to election time. Voter ID, citizenship requirements, changes to voting methodology and limits to early voting all present challenges and dynamics that can deepen party divides.

We use prediction markets to offer insights into the current political zeitgeist. Based on Kalshi data, prediction markets project a 59% probability that Republicans will win the Senate, a 13 percentage point increase from just two months ago.¹⁰ Kalshi’s prediction market currently affixes an 81% chance that Democrats will win the House, and that margin has been relatively consistent in recent weeks but peaked at 86% in mid-April.¹¹

The risk factor that would cause financial markets the largest concern remains a shock to borrowing costs in the form of higher interest rates. With a leveraged consumer base, significant AI project investment, a new Federal Reserve Chair and a challenged government fiscal picture, the bond market may prove fickle should policy agendas or election outcomes suggest higher indebtedness risks. It is likely too early for markets to draw conclusions with 129 days until polls close, but we will continue to update you with our thoughts as they develop.  

¹ Micron Technology, Inc. “Fiscal Q3 2026 Earnings Call Prepared Remarks.” https://investors.micron.com/static-files/631b1a32-5537-46ae-8f40-82e42fc79dfe. Accessed 25 June 2026.

² Ibid

³ MacDailyNews. “RAMageddon Hits Apple: Price Hikes on Macs and iPads Trigger Stop Drop, But Analysts See Smart Margin Defense.” June 26, 2026. https://macdailynews.com/2026/06/26/ramageddon-hits-apple-price-hikes-on-macs-and-ipads-trigger-stock-drop-but-analysts-see-smart-margin-defense/. Accessed 26 June 2026.

⁴ MacDailyNews. “Apple Customers Won’t Blink at RAMageddon Price Increases.” June 25, 2026. https://macdailynews.com/2026/06/25/apple-customers-wont-blink-at-ramageddon-price-increases-but-dell-lenovo-and-samsungs-will/. Accessed 26 June 2026.

⁵ Simon, Michael. “Brace Yourself, Apple’s Price Hikes are Much Worse Than We Thought.” Macworld. June 25, 2026. https://www.macworld.com/article/3176418/ugh-apples-price-hikes-are-brutal.html. Accessed 26 June 2026.

⁶ Forristal, Lauren. “Xbox follows Apple with Price Increases.” Techcrunch. June 25, 2026. https://techcrunch.com/2026/06/25/xbox-follows-apple-with-price-increases/. Accessed 26 June 2026.

⁷ The CME Group. “Gold Futures- Margins.” https://www.cmegroup.com/markets/metals/precious/gold.margins.html. Accessed 25 June 2026.

⁸ The Bank of England. “Interest Rates and Bank Rate: Our Latest Decision.” https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate. Accessed 25 June 2026.

⁹ USPollingData. “2026 Midterm Elections.” https://uspollingdata.com/midterms-2026/. Accessed 26 June 2026.

¹⁰ Kalshi. “Which Party Will Win the U.S. Senate?” https://kalshi.com/markets/controls/senate-winner/controls-2026?op_market_ticker=CONTROLS-2026-R. Accessed 26 June 2026.

¹¹ Kalshi. “Which Party Will Win the U.S. House?” https://kalshi.com/markets/controlh/house-winner/controlh-2026?op_market_ticker=CONTROLH-2026-D. Accessed 26 June 2026.