Nvidia stock falls as memory chips become the new AI bottleneck

Nvidia’s stock has fallen 15% since its peak in May, according to Bloomberg, even as the company’s projected revenue continues to grow. Compared with expected earnings, Nvidia is now cheaper than the S&P 500 (the benchmark US stock index) average — investors are paying less per dollar of its projected profit than they do for a typical large American company.

Micron, one of the world’s largest makers of DRAM (dynamic random-access memory, the standard chip used in computers and servers), has nearly tripled in value over the same period, according to data tracked by Datatrack, which has followed DRAM spot prices since 2023. The shift reflects a supply-demand split: the GPU shortage that looked alarming last year has eased off a bit, while memory companies have been able to raise prices tenfold over the past year because demand is growing faster than supply can scale. The industry as a whole vastly underestimated how much memory it would need for the data center buildout in the summer of 2025.

The spot price for an hour of time on an Nvidia H100 GPU peaked in May around $3.20 an hour, according to the compute marketplace Ornn, and has steadily dropped since — a decline that mirrors Nvidia’s own stock price. Nvidia’s value as a company is closely tied to the price of compute, while Micron and its peers are tied to the price of DRAM, and the two are now moving in opposite directions.

Google, Amazon, Microsoft, and OpenAI have each launched custom processors to lessen their dependence on Nvidia. Wayne Nelms, co-founder and CTO of Ornn, said those custom processors are good enough to drive down the price of compute: “More GPU and accelerator players are entering the market. Everyone wants to make their own silicon, but no one is making their own DRAM.” High-bandwidth memory (HBM) chips, which move data in and out of processors, have been improving only incrementally for 20 years, and Nelms said the current dynamic will likely persist unless there’s a major technological breakthrough on HBM, a shift in supply and demand, or a new entrant to the memory market.

Why it matters

Nvidia’s dominance is under pressure as the GPU shortage eases and tech giants roll out custom processors, while memory manufacturers like Micron capture outsized value from the ongoing DRAM shortage.