Why GM's memory chip guidance could help stabilize stocks like Micron and Sandisk

Yahoo Finance Executive Editor Brian Sozzi analyzes how General Motors' second-quarter earnings report, which raised full-year profit guidance despite higher memory chip costs, signals that the memory chip shortage remains strong. This contradicts market fears of a slowdown that have caused Micron and Sandisk stocks to sell off. GM reiterated its guidance for $1.5 billion to $2 billion in commodity inflation and higher DRAM costs, up from earlier 2026 guidance. The article explains that demand for high-bandwidth memory used in AI servers from companies like Nvidia, Microsoft, and Amazon continues to outpace supply, keeping prices high and giving suppliers pricing power. While Micron hit a record high in late June, it has since dropped 25% on AI demand concerns. GM has offset higher DRAM costs through cost cuts and truck pricing, reinforcing the bullish case for memory chip stocks.