Micron stock jumped 7.76% on Friday as CNBC’s Jim Cramer explained why chip stocks have more room to grow. The reason is simple: companies can’t build new chips fast enough because they lack the equipment needed to expand production.
“We don’t have enough equipment to expand production of these chips, and we can’t put it together fast enough,” Cramer said. Micron makes memory and storage technology for artificial intelligence systems.
CEO Sanjay Mehrotra told Cramer that demand for his company’s products keeps growing. Micron plans to spend $200 billion to build more production capacity in the United States. On Friday, the company broke ground on a 600,000-square-foot facility in upstate New York.
“AI driven-demand is accelerating. It is real. It is here, and we need more and more memory to address that demand,” Mehrotra said on CNBC’s “Squawk on the Street.” The construction was made possible by the CHIPS Act, a law that provides government subsidies for domestic semiconductor manufacturing.
Cramer pointed out that the new facility won’t solve the chip shortage soon. These plants take years to build and start producing chips. Unless demand drops, Cramer predicts prices for these products will continue rising.
Micron isn’t the only company benefiting from this situation. Cramer named Western Digital, Seagate, and Sandisk as other chip stocks that have posted big gains this year. All three companies are experiencing the same supply constraints.
The shortage caught most companies off guard. A year ago, the industry appeared to have too many chips. Cramer said only one company predicted the surge in demand: Nvidia.
“Only Nvidia really saw it coming. They teamed up with the best of the best, Taiwan Semiconductor, to make all the high-end chips that are needed,” Cramer said. “There’s no bottleneck there. There’s no shortage, at least not in comparison to memory.”
While Nvidia partnered with Taiwan Semiconductor to meet demand for high-end processors, memory chip makers now face shortages. The equipment needed to manufacture memory and storage chips remains in short supply. Building new factories takes time and requires specialized tools.
The $200 billion Micron plans to invest represents a massive commitment to domestic production. The upstate New York facility is just one part of this expansion plan. These investments show how seriously companies are taking the supply shortage.
Stock markets have stayed strong despite global tensions. The S&P 500, Dow Jones, and Nasdaq have all posted gains in 2026. The Dow Jones is up 3% this year, while the Nasdaq has gained 1.2%.
Anthony Esposito from AscalonVI Capital told CNBC that markets have ignored geopolitical risks. He noted that major events like bombings in the Middle East barely moved stock prices. Europe’s Stoxx 600 index is up almost 4% this year.
In Asia, the MSCI AC Asia Pacific Index hit a new high after rising more than 5% in 2026. Japan’s Nikkei 225 and South Korea’s Kospi both reached record levels. Investors appear focused on economic growth rather than political uncertainty.
The U.S. Supreme Court is expected to rule soon on tariffs imposed during the previous administration. Mehrotra confirmed on Friday that AI-driven demand for memory chips continues to accelerate and shows no signs of slowing down.
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