Micron Technology stock was rising sharply early Monday amid a resurgence of the artificial-intelligence momentum trade, alongside reminders of the shortage in memory chips.

Micron shares were up 9.59% at $1,075.73 with markets cheered by the prospect of a U.S.-Iran peace deal.

Shares have been volatile as investors debate Micron’s valuation. The chip maker trades at a notably low forward price-to-earnings ratio, a reflection of the memory industry’s frequent boom-and-bust cycles. Micron was trading at 9.74 times forward earnings as of Friday’s close versus 25.5 times for the tech-heavy Nasdaq Composite according to FactSet.

However, the prospect of a so-called supercycle in memory chips, caused by the need for the components in AI hardware, is leading investors to reconsider Micron’s valuation. Barron’s has argued Micron is undervalued considering the potential for a long-term earnings boost.

The latest sign of the memory-supply crunch came last week when the new head of the Xbox videogame console division at Microsoft warned in a publicly released memo that the unit was facing a “hardware component crisis.” Xbox CEO Asha Sharma said memory costs have risen roughly fivefold over the past two years and the company is unable to make as many consoles as consumers want.

“That a platform holder is publicly weighing a new hardware model and flagging constrained console output shows the pass through has moved from PCs and phones into fixed BOM [bill of materials] devices that can’t easily reprice, reinforcing our structural shortage through 2027+ thesis,” wrote Wedbush analyst Matt Bryson in a research note.