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MU stock was up 4.4%, while SNDK stock rose 3%.
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Alphabet and Advanced Micro Devices were among the biggest names slated for removal from the Russell 1000 Value Index.
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Retail sentiment was ‘neutral’ for MU and ‘bearish’ for SNDK.
Micron Technology and SanDisk stocks rose in overnight trading ahead of Tuesday, after FTSE Russel moved the widely-tracked memory chip stocks from a value index to a growth index.
MU was up 4.4%, while SNDK was up 3%. Shares of WDC and STX also gained, rising about 1.7%.
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FTSE Russell announced a preliminary list of changes to its indexes on Friday after the market closed. Micron and SanDisk are proposed for removal from the Russell 1000 Value Index and addition to the Growth index, driven by sharp rallies amid high demand for memory chips and AI-related momentum.
Google parent Alphabet and Advanced Micro Devices are set to be removed from the Russell 1000 Value Index, while Apple and Microsoft will join the index.
The list released on Friday remains preliminary and will be finalized on June 18, ahead of the index reconstitution, which takes effect on June 29.
Growth Classification A Boost
The classification is significant because hundreds of institutional investors, including exchange-traded funds (ETFs) and mutual funds, base their portfolio allocations on these index classifications. As a result, any rebalancing can trigger large shifts in fund holdings, potentially triggering moves in the stocks in question.
The Russell 1000 Index tracks the 1,000 largest publicly traded U.S. companies and represents the vast majority of the U.S. stock market’s total value, making it a key benchmark for large-cap investing.
A breakneck pace of AI data center buildout has driven incredible demand for memory components and chips, leading to shortages and price hikes. Major producers have seen significant growth in their businesses over the last year, with their stocks growing severalfold, and analysts expect favorable market dynamics to persist over the next few years.
MU, SNDK Stock Move, Recent Catalysts
SanDisk shares have gained a staggering 523% year to date, while Micron shares are up 163%. The Roundhill Memory ETF (DRAM), a newly launched fund that tracks U.S. and Korean memory stocks, including Samsung and SK Hynix, has gained 84% since its launch on April 2.
Last week, sentiment in the sector improved after Nvidia’s earnings beat, which confirmed that AI chip demand remains strong, and Samsung signed a preliminary deal with workers to avoid a major strike that could have disrupted the global chip supply chain.
Meanwhile, Micron said on Friday it would invest more than $2 billion to expand and modernize its memory chip manufacturing facility in Manassas, Virginia, and has started production of its 1α DRAM chip, which it described as the most advanced memory chip ever manufactured in the U.S.
Retail Cautious After Sharp Runup
Despite strong business forecasts, the sharp run-up in memory stocks has left investors questioning how much upside remains. As a result, retail traders have stayed cautious. On Stocktwits, retail sentiment was “neutral” on MU and “bearish” on SNDK and DRAM as of late Monday.
“$MU is showing strong overnight momentum, up ~4.5% in after-hours flow, with traders rotating back into semis on renewed attention after recent macro commentary tied to the name,” a trader wrote.
“Key question for tomorrow is follow-through vs fade. If premarket strength holds and volume confirms at the open, a 10%+ intraday extension isn’t off the table in a momentum tape, but it still needs participation, not just gap strength,” they said.
Monday was a market holiday in observance of Memorial Day.
For updates and corrections, email newsroom[at]stocktwits[dot]com.
Yuvraj Malik has no position in any of the stocks mentioned in this article. StockTwits’ news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits.
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