Micron Technology Inc (Micron (MU)) is attracting intense investor and trader interest as the AI-driven semiconductor rally pushed the memory-chip maker to fresh highs and triggered heavy options activity across the market.

Kevin Simpson Cuts Risk After Micron's Massive Rally

Capital Wealth Planning founder and CIO Kevin Simpson told CNBC on Saturday that Micron's sharp gains prompted his firm to scale back risk exposure through covered-call strategies.

Simpson noted that Micron had climbed more than 150% year to date and nearly doubled in a month, leading his team to focus on locking in profits and managing position size rather than remaining fully exposed to volatility.

He said the firm wrote covered calls on about one-third of its Micron holdings, collecting more than $32 in premium on a $660 strike call expiring within a week.

Simpson added that the strategy would effectively exit those shares around the high-$600 range while still allowing the firm to participate in additional upside through its remaining Micron position.

Options Traders Flood Into Micron Bets

Traders aggressively piled into Micron options on Tuesday following the stock's roughly 700% rally over the past year, CNBC reported last week.

More than $2.8 billion worth of Micron options premium traded by midday in Chicago, exceeding the combined options premium traded in the SPY and QQQ ETFs.

According to SpotGamma data, Micron accounted for 12 of the top 20 options trades during the hour after the opening bell, despite no major company news and earnings still months away.

Call buying significantly outpaced put activity, while implied volatility surged to 84 — nearly five times the volatility level of the S&P 500.

AI Momentum Fuels Bullish Semiconductor Sentiment

Options traders targeted both deep in-the-money and out-of-the-money Micron calls, with many of the largest trades focused on later-dated expirations that reflected expectations for continued upside in the stock.

Micron's market value surpassed $700 billion as investors continued treating the company as one of the market's strongest AI-related trades.

The bullish sentiment also spread across related semiconductor names, including Sandisk Corp (SanDisk (SNDK)) and Western Digital Corp (Western Digital (WDC)), where call buying dominated trading activity as both stocks reached record highs.

CNBC's Jim Cramer said Micron is benefiting from a long-term transformation in the memory and storage market rather than another temporary semiconductor cycle.

Cramer pointed to Micron's latest quarterly results and said discussions with executives at Amazon.com Inc (Amazon (AMZN)) reinforced his belief that storage demand is becoming increasingly secular instead of cyclical.

AI Demand Tightens Supply Across Storage Industry

Cramer said companies, including Micron, SanDisk, Western Digital, and Seagate Technology Holdings Plc (Seagate (STX)), are benefiting from sustained AI-driven demand growth, while years of weak profitability have discouraged major industry capacity expansion.

According to Cramer, the storage industry entered the current AI boom with limited new supply, creating a favorable supply-demand setup for established players.

He also credited Micron CEO Sanjay Mehrotra for recognizing the coming demand surge early and aggressively expanding capacity to capture the opportunity.

AI Buildout Continues Fueling Semiconductor Winners

Cramer added that Micron's valuation still appears attractive as investors increasingly gain confidence in the durability of AI-related demand trends.

In his latest AI "winners list," Cramer said the AI and data-center expansion continues generating an "explosion of profits" for chipmakers and infrastructure companies as businesses deploy more computing power to support AI workloads.

MU Price Action: Micron Technology shares were up 2.22% at $763.36 during premarket trading on Monday. The stock is trading at a new 52-week high, according to market data.