1. The world needs a lot more memory chips and hard drives. The companies making those products have very good reasons not to rush the job. The memory business is in its greatest years as the rapid build-out of infrastructure for AI is consuming a large portion of the available supply of NAND flash memory, DRAM memory, and hard drives. This resulted in a shortage of memory for other markets such as PCs and smartphones. "Memory is in the midst of a generational supply and demand mismatch," Joe Moore, the Morgan Stanley chip analyst, reported last month.
The tight supply of memory is driving up prices and sharply boosting revenue and earnings for memory producers. A severe market shortage accompanied by skyrocketing prices would normally lead manufacturers to boost their production. However, memory companies have been burned by sharp price swings in the past, being slightly cautious in their actions this time.
Memory stocks have become a hot commodity on Wall Street. Micron, Seagate, and Western Digital saw their stock prices more than double in 2025 and were the biggest gainers on the S&P 500 for the year. Flash memory maker Sandisk has soared 10-fold since spinning off from Western Digital in February. SK Hynix is up 88% in just the past three months. Analysts expect prices on memory chips and hard drives to remain high this year, which will likely help sustain those elevated market values. But the industry has a long history of brutal cycles, where downturns in pricing can often take producers into the redand sink their stock prices. The last one happened in 2023, when Micron, Western, Seagate, and Hynix all yielded annual operating losses.
Will this time be different? It could be. The AI computing systems designed by companies like Nvdia and Advanced Micro Devices require gobs of specialized DRAM to perform their functions. Those functions create reams of new data that has to be stored on components like hard drives and flash-based solid-state drives. This has created a data explosion, leading to total data-storage shipments between NAND flash and hard drives averaging 19% annual growth over the next four years, compared with a 14% average growth rate over the past 10. Nvdia and AMD have also accelerated their own product cycles, introducing new systems every year now. Boosting the DRAM memory on those systems helps improve the overall performance over the previous generations. Nvdia 's Rubin GPU chips, which were unveiled at CES 2026 nearly triple the memory bandwidth compared to the Blackwell chips it started shipping last year. Deman for such systems is ultimately powered by capital expenditures by the world's largest tech companies. Thathas already reached nosebleed levels but isn't yet showing any signs of slumping. Based on estimates for the December-ended quarter, total capital spending by Amazon, Google, MS, and Meta hit $407 billion in 2025. Analysts expect that to jump to about $523 this year, as the demand stays as robust as the current state, said Morgan Stanley's Moore.
2. Tech stocks got a lift overnight from Taiwan's semiconductor giant, TSMC. Meanwhile, oil prices skyrocketed overnight as President Trump's rhetoric of striking Iran toned down.
After the shift from traditional mutual funds to ETFs, both the industry's assets and fund flows were concentrated on the latter, according to the Investment Company Institute. And ETFs still keep evolving, but not always to the saver's benefit.
The initial edge of ETFs was based on the fact that they could be traded throughout the day and are more tax-efficient. Both investment vehicles receive dividends, but holders of old-fashioned mutual funds also can get capital-gains distributions when other owners sell. Since retail brokerage commissions were eliminated, ETFs have almost become a no-brainer for accounts that can own them.
For well-informed investors, ETFs are a huge moneymaker as foreign markets and proven investing strategies can be accessed with a few clicks. Stock indexes like S&P 500 cost hardly anything - they've become so huge that there's really no longer room for newcomers to grab a piece of that business.
However some stretch tax rules to the limits, like offering T-bill interest without paying it out. Others turn executives' concentrated stock positions into a diversified fund without realizing gains. Owners might worry about t future call from the taxman. For example, leveraged funds attract savers with a quick short-term gains but have incinerated billions of dollras through gradual value decay tied to volatility. Income-generating ETFs with unbelievable yields are popular too, but listen to this : One that sells covered calls on Tesla stock touts a 46% distribution rate, but since launching in 2022 owners have just made 62% in total because the prices keep plunging. Actual Tesla stock would have earned a 144%.
Lastly there are the Thematic ETFs, which tracks the latest hot sector such as quantum computing,