Some of the biggest customers of Nvidia Corp. (NASDAQ: NVDA) have reportedly been told that prices for servers containing its AI chips will rise by more than 15%.
The hike, however, may reveal as much about Micron Technology Inc.'s (NASDAQ: MU) pricing power as Nvidia's.
Dan Ives, partner and senior managing director at Yorkville Ives & Co., says the hike shows AI demand continues to overwhelm supply. With soaring memory costs behind it, Micron could enjoy even greater earnings leverage.
The increase applies to Vera Rubin and Grace Blackwell systems shipping in early 2027, and covers complete servers rather than Nvidia's chips alone.
Why Ives Calls Higher Prices Bullish
"We're seeing a memory supercycle take place," Ives told Bloomberg on Monday, adding that Nvidia has little choice but to pass some of the extra cost through to customers.
Ives estimates demand for advanced chips may be running at up to 15 times supply. With capacity so scarce, he expects much of the increase to pass through the supply chain to enterprise customers.
Hyperscalers, meanwhile, cannot take their foot off the gas as AI demand accelerates, he said.
He does not expect supply and demand to reach equilibrium until mid-to-late 2028. Demand is "accelerating, not decelerating," Ives said, calling the trend "bullish for the overall tech trade."
Micron Sits Inside a Critical Bottleneck
If memory is what's forcing Nvidia to raise prices, the biggest earnings impact may land further down the supply chain.
Micron has three products aimed at Nvidia's Vera Rubin ecosystem: HBM4 designed for Vera Rubin, SOCAMM2 memory for Rubin systems and PCIe Gen6 storage optimized for Nvidia's BlueField-4 architecture.
The shortage is already influencing Nvidia's designs. TrendForce said planned allocations from Micron, Samsung and SK Hynix would cover only about 60% of Nvidia's expected 2027 LPDRAM requirements, reportedly prompting Nvidia to halve the SOCAMM capacity planned for Vera Rubin.
The benefit is showing up in Micron's results. The company reported quarterly revenue of $41.46 billion, up from $9.3 billion a year earlier, with cloud and data-center products generating $25.3 billion, or 61% of sales. Non-GAAP gross margin reached 84.9%, and Micron guided for roughly $50 billion in fourth-quarter revenue at an 86% margin.
Could Micron Really Win More?
Counterpoint estimated Micron's share of global HBM revenue at approximately 21% in the first quarter, compared with 58% for SK Hynix. Its exposure to HBM4, SOCAMM2 and storage nevertheless gives it a broader Vera Rubin opportunity than HBM share alone suggests.
Prediction-market traders still see Nvidia as the AI boom's ultimate winner. Polymarket gives Nvidia a 74% chance of finishing 2026 as the world's most valuable company, far ahead of Apple at approximately 14% and Alphabet at 10%.
The reported server-price increase, however, shows that some of the boom's strongest pricing power may be moving through the supply chain.