Memory chipmaker Micron Technology (MU.O) surged 18 per cent earlier this week and was set to open trading at a record high after its strong revenue forecast fanned optimism that soaring demand for AI hardware would drive up growth at the Nvidia supplier.

Other chip firms such as Western Digital (WDC.O), Advanced Micro Devices (AMD.O) and Broadcom (AVGO.O) also rose between 1.9 per cent and 7.1 per cent before the bell as Micron, which reports earnings before its peers, helps in gauging broader semiconductor demand.

The company said on Wednesday its high-bandwidth memory (HBM) chips, which refer to ultrafast semiconductors used in the development of AI applications, were sold out for 2024. A majority of its 2025 supply has also been allocated, it added.

“Memory is a key beneficiary of AI adoption and we expect a V-shaped recovery in the industry, with revenues expected to grow by 55 per cent in 2024 and 35 per cent in 2025,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Micron, one of the two suppliers of HBM chips to Nvidia (NVDA.O) along with South Korea’s SK Hynix (000660.KS), was set to add nearly $19 billion to its market value, based on its premarket share price of $113.40.

On Wednesday ahead of results, Micron was trading at about 24 times its 12-month forward earnings estimates, compared with 14.53 for smaller rival Western Digital.

Micron’s shares have surged more than 60 per cent in the past 12 months, buoyed by investor confidence that the company will grow its share of the high-margin HBM market this year and the next.

Micron’s chief business officer, Sumit Sadana, told Reuters on Wednesday the company had signed up new customers for its HBM products that it was yet to announce.

Its current-quarter forecast for adjusted gross margin of 26.5 per cent, plus or minus 1.5 per cent, was also above market estimates of 20.8 per cent, as the relatively new HBM chips are in short supply, giving companies such as Micron more pricing power.

“Tight supply, increasing demand, normalization of excess inventory coupled with the increased size of HBM is driving dramatic improvements in pricing,” Piper Sandler analysts said.