Micron Technology and Sandisk stock continued their historic rally this week, thanks to a flurry of headlines signaling overwhelming demand and limited supply for memory.

Micron, the memory chip maker, jumped 16.6% Friday, putting it end the week up 37.73%. That would mark the stock's best weekly performance since 2008, according to Dow Jones Market Data.

Sandisk, which specializes in flash memory, also rose 16.6% Friday. Up 31.62% on the week, shares have soared roughly 4,100% since the company spun off from Western Digital last February.

The root cause for this week's blockbuster gains was the same as always: artificial intelligence.

Quarterly reports from the largest tech companies have pointed to the continued growth of AI investments and a shortage of components, memory perhaps chief among them. It came as no surprise last week when Sandisk breezed past quarterly earnings expectations in this backdrop.

In the latest sign of a tightening supply bottleneck that has sent memory prices skyrocketing, customers are offering to foot the bill for greater production capacity. Tech companies have approached Korean memory chip maker SK Hynix with offers to invest in production lines and fund purchases manufacturing tools, Reuters reported Thursday.

SK Hynix didn't immediately respond to Barron's requests for comment.

On the demand side, the AI boom doesn't show any signs of slowing down. This week alone, Anthropic agreed to lease AI capacity from SpaceX; Advanced Micro Devices reported a huge jump in data-center sales; and Akamai Technologies won a $1.8 billion infrastructure deal with an undisclosed AI model provider.

"Recent headlines point to robust AI infrastructure demand," wrote BNP Paribas analyst Nick Jones in a research note Thursday. More infrastructure means more components, and that means more business for Sandisk and Micron.

Although the stock prices have soared, investors aren't driving up shares on hype alone. Sandisk trades at 9.5 times projected earnings over the next 12 months and Micron trades at 8.6 times. That is roughly in line with multiples of 8 times and 8.7 times a year ago, respectively, and far below the PHLX Semiconductor index's average of 25.9 times.

The Index jumped 4.9% on Friday in what was an excellent session for chip stocks.