In the year 2025 just passed, memory chip stocks and high-end storage product stocks were undoubtedly one of the hottest investment themes in the global stock market, and the same holds true at the beginning of 2026—for instance, SanDisk Corp. (SNDK.US), a leader in data center enterprise SSD storage components, has seen its cumulative gain exceed 110% since the start of 2026, following an astounding 580% surge throughout the entirety of 2025. Even after experiencing the super bull market trajectory of 2025 and the continuing bullish momentum in early 2026, global investors are not overly anxious about the suddenly elevated valuations of these storage technology companies, as they believe an unprecedented wave of artificial intelligence data center construction is fundamentally altering the "strong cyclical nature" of the memory chip sector. Despite SanDisk (SNDK.US), Western Digital Corp. (WDC.US), Seagate Technology PLC (STX.US), and Micron Technology (MU.US) having emerged as some of the best-performing components in the S&P 500 index since late 2024, investors continue to view them as highly attractive stock allocation targets. Furthermore, although they may appear increasingly expensive from a historical price-to-valuation perspective, the near "unlimited faith" in the AI investment theme is rendering these historical comparisons largely irrelevant. During the nearly year-long bull run in storage stocks, besides the significant share price increases of the three major memory chip manufacturers—SK Hynix, Samsung, and Micron—the share prices of Seagate, SanDisk, and Western Digital all surged over 200% in 2025, with SanDisk, the leader in enterprise SSD storage systems, seeing a rise approaching a staggering 600%; these memory chip and product line giants have substantially outperformed the broader U.S. stock market and even global equity markets. The core logic behind the powerful price surges of these three storage product giants lies in the fact that the booming AI data center construction process not only drives a surge in HBM demand, causing memory chip production capacity to shift entirely from consumer electronics grade to the far more complex manufacturing and packaging processes required for HBM, but also the three-layer storage stack of AI data centers (hot tier NVMe SSD, warm tier/nearline HDD, cold tier object and backup) is simultaneously undergoing exponential expansion. Coupled with longstanding supply discipline from HDD oligopolies, a recovering NAND cycle, and multi-year volume lock-ins by cloud providers, this has led to simultaneous leaps in volume, pricing, and order visibility for these three companies. As shown in the chart above, memory chip stocks and related technology stock prices have continued to soar—incredibly strong demand, closely linked to AI training/inference, is driving the robust growth pace of this group. The data in the chart above is aggregated and standardized based on percentage gains up to July 21, 2025. Whether it's Google's massive TPU AI computing clusters or vast clusters of Nvidia AI GPUs, all require fully integrated HBM memory systems paired with AI chips; furthermore, tech giants accelerating the construction or expansion of AI data centers must purchase server-grade DDR5 memory and enterprise-class high-performance SSDs/HDDs on a large scale. Samsung Electronics, SK Hynix, Micron Technology, plus the three storage product leaders, are precisely positioned or concentrated in certain sub-categories of these three core storage areas: HBM, server DRAM (including DDR5/LPDDR5X), and high-end data center-class SSDs/HDDs, making them the most direct beneficiaries within the "AI memory + storage stack," essentially reaping the "super-dividends" of the AI infrastructure wave. On Wall Street, Morgan Stanley, Nomura, and Bank of America are loudly proclaiming the full arrival of an AI-driven "memory chip super-cycle," suggesting the intensity and duration of this cycle could far surpass the "cloud computing era-driven memory super bull market" of 2018. The intensely bullish global sentiment towards memory chips propelled South Korea's benchmark Kospi index to a wild 76% surge in 2025, making it arguably the wildest stock market globally that year, primarily due to the frenzied rises of its two largest constituents, which together account for over 30% of the index's weight—global memory chip leaders SK Hynix and Samsung Electronics, which contributed nearly half of the index's gains. On January 22, 2026, the Kospi index even briefly breached the epic 5,000-point milestone to set a new historical high, again thanks to the strong gains year-to-date from these two heavyweight memory chip giants. Japan-based SSD solutions provider Kioxia stated on Thursday that its NAND flash production capacity for 2026 is already completely sold out, and it expects tight NAND flash supply to persist at least until 2027. A recent memory chip industry tracking research report from financial giant Nomura indicates that, driven by a powerful resonance from "the faster-than-expected acceleration of global AI data center construction, leading to a simultaneous surge in demand for enterprise-grade high-performance server DRAM, HBM memory systems, and data center high-performance SSDs," the upward trajectory of DRAM/NAND memory chip prices has steepened significantly. Analysts at Nomura also judge that this "memory chip super-cycle," which began in the second half of 2025, will last at least until 2027, with meaningfully new supply unlikely to emerge before early 2028. Nomura suggests that investors should continue to overweight memory leaders in 2026, focusing on the "price-profit-valuation" triple play as the main investment theme for memory stocks, rather than viewing them solely through the HBM lens. The firm expects the three major memory chip companies to achieve record-breaking profits. Sustained strong demand for DRAM/NAND memory chips and the野蛮 expansion in prices for these product series (e.g., DDR4/DDR5/enterprise SSD series) are primarily due to the AI computing torrent pushing memory chip demand and their importance to AI training/inference systems to unprecedented heights. Global AI computing demand continues to exhibit an exponential growth trend, with supply struggling to keep pace with demand intensity, a point clearly evident from the exceptionally strong earnings data reported last week by the "global chip king," Taiwan Semiconductor Manufacturing (TSM.US). TSMC's Q4 gross margin surpassed 60% for the first time, net profit significantly exceeded expectations, and the company forecast full-year 2026 revenue growth接近 30%, while also substantially raising its 2026 capital expenditure guidance to $52-56 billion; both core guidance figures far surpassed market expectations. Additionally, TSMC management significantly raised its revenue compound annual growth rate (CAGR) expectation for its AI-related chip foundry business from the previous "mid-40% range" to the "mid-to-high 50% range." This world's largest chipmaker's exceptionally strong results and future guidance spurred a collective rally in U.S. chip stocks recently, with memory chips and semiconductor equipment showing the most robust gains. This time it's different! AI is reshaping the global memory chip market, forcefully tearing off the typical "cycle" label. "That whole cyclical script for how to view memory cycles has been ripped up forcefully," said Joe Tigay, a portfolio manager at Equity Armor Investments. "It's a new world with a demonstrably higher floor, which suggests expensive stock prices and valuation trends will be more sustainable than in prior cycles. The world's largest tech companies, with unfathomably deep pockets, will be fighting tooth and nail for memory products for a considerable period." SSD leader SanDisk's stock price has soared since its spinoff from Western Digital last year, starting 2026 strongly with a 111% gain. However, the stock currently trades at 23 times estimated earnings (a forward P/E of 23x), still below the Nasdaq 100 index's equivalent valuation multiple of approximately 25x. Seagate's valuation multiple is around 24x, and Micron Technology, the sole U.S.-based memory chip manufacturer, even after a 36% surge in January, remains one of the ten cheapest stocks in the Nasdaq 100 based on forward P/E metrics, with a forward P/E even below 11x. For the vast majority of companies, these valuation levels would hardly be considered "exorbitantly high." However, due to the typical cyclical characteristics of memory chip/storage product stocks, they have historically commanded relatively low market valuations. Certainly, from other valuation measures or technical indicators, these storage stock prices and valuations do appear expensive. The 14-day Relative Strength Index (RSI) for SanDisk, Micron, and Western Digital is at levels technical traders consider significantly "overbought," and Seagate is also approaching this "overbought" technical indicator. The stock performances of the three major memory chip manufacturers—Samsung, SK Hynix, and Micron—as well as storage product leaders like SanDisk and Seagate, have historically been tightly correlated with the industry's boom and bust cycles. For a long time, demand for storage products was highly dependent on the PC industry, and more recently, on the smartphone business. The short-term剧烈 fluctuations in these consumer electronics markets made it difficult for memory chip/storage product manufacturers to time the release of new supply accurately, leading to periodic oversupply. Due to the Fed's aggressive rate-hiking cycle crushing consumer electronics demand and the unusual inventory hoarding trend during the pandemic, Micron was still in the red in 2023, while Western Digital and Seagate also continued to post significant losses through 2023 and 2024. This "cyclical nature" has traditionally significantly suppressed valuation multiple expansion, primarily because investors anticipated a sharp downturn that would erode profits following an upswing. However, with the advent of AI large language models and applications like ChatGPT, the demand landscape for memory chips has undergone a fundamental change: the world's largest tech companies are actively investing in building massive infrastructure for this technology, and memory chips and other storage components are crucial parts of it. This backdrop is expected to last at least until 2027, driving accelerated market size growth and keeping storage product prices soaring; an index measuring spot prices for DRAM chips has risen sharply in recent months. As shown in the chart above, prices for various types of computer memory chips are still surging recently, particularly spot prices for DDR5 16GB memory components used in enterprise storage, which are seeing the most猛烈 gains. "This time it really is different," said Francisco Jeronimo, an analyst from IDC, who described the rise in memory chip/product prices as a "crisis" for some hardware manufacturers. "This is not a normal cycle. It's a profound, long-term change, and it could last for two to three years." Although the phrase "this time is different" is often associated with market tops, Jeronimo believes the critical role of memory chips in AI infrastructure construction might permanently raise the price floor for memory chips/storage products. "Even if the AI bubble bursts, or AI storage demand slows, I don't think prices will go back to the levels of six months ago," he said. The market is still underestimating storage demand! Wall Street's bullish sentiment on memory chips is becoming increasingly frenzied. This senior analyst from IDC is not the only optimistic veteran market participant. BNP Paribas upgraded Seagate's stock rating to "Outperform" on Wednesday, with the bank's analyst Karl Ackerman stating there is "stronger and more solid conviction" that "robust data center storage demand could drive a new upcycle lasting longer than we initially expected," and therefore believes "a structural valuation re-rating above 20x for Seagate and Western Digital is very reasonable." Wall Street analysts are becoming increasingly positive on the fundamentals and stock price prospects of core companies related to memory chips/storage products. Bloomberg compiled data shows that over the past three months, Wall Street analysts' consensus estimate for SanDisk's 2026 EPS has been revised upwards by a record 172%, while revenue expectations have been raised by over 21%. Expectations for Micron have also been significantly revised upwards by analysts. Nomura's latest assessment reiterates that this "memory chip super-cycle" will last at least until the end of 2027, explicitly stating in its report that "meaningful supply increases [are expected] earliest in 2028." The report repeatedly emphasizes that expanding production capacity for memory chips and HDD/SSD storage components is not something that can be done "on a whim," involving the pace of greenfield/brownfield/customized semiconductor equipment upgrade plans. Using SK Hynix as an example, Nomura directly points to capacity constraints at precise levels—cleanroom long cycles/wafer capacity, significant delays in yield and cycle times due to advanced process upgrades, and limitations on overseas chip fab construction/upgrades—thereby concluding that supply increases will be slower and the shortage will persist longer. Analysts at Citigroup displayed an even more aggressive bullish stance than Nomura in their latest outlook. The analysts believe that, driven by the proliferation of AI Agents and a surge in AI CPU memory demand, memory chip prices will experience runaway increases in 2026. Citi's analysts violently raised their 2026 average selling price (ASP) growth forecast for DRAM from 53% to 88%, and for NAND from 44% to 74%. Citi's analysts expect server DRAM ASP to skyrocket 144% year-over-year in 2026 (previous forecast +91%), propelled by both AI training and inference demand; for a mainstream product like the 64GB DDR5 RDIMM, Citi predicts its price will reach $620 in Q1 2026, a 38% sequential increase, far above the previous forecast of $518. In the NAND space, Citi's forecasts are equally aggressive, raising the 2026 ASP growth expectation from +44% to +74%; within that, enterprise SSD ASP is projected to increase 87% year-over-year. In the view of Citi's analysts, the memory chip market is entering an extremely intense seller's market, with pricing power fully in the hands of memory giants like Samsung, SK Hynix, Micron, and SanDisk. Divya Mathur, an emerging markets equity portfolio manager at ClearBridge Investments, recently stated that memory chip stocks and high-end storage product stocks are the most investable area in the global equity market, emphasizing that the market clearly continues to underestimate the strength of demand for memory chips driven by the AI infrastructure trend. The ClearBridge SMASh Series emerging markets equity fund managed by Mathur, according to institutionally compiled equity fund performance data, outperformed 97% of its peers over the past year; the fund has made significant bets on memory chip giant Samsung Electronics—whose stock doubled in 2025—and SK Hynix, whose stock nearly quadrupled in 2025. Mathur expects this bull trend to continue for the long term, stating that the AI wave will permanently reshape this long-perceived cyclical and commoditized chip industry. "Since the semiconductor era began, the memory industry was never built for the data storage needs of the AI space—but, over the past year or so, we have this new growth driver," said the veteran portfolio manager Mathur, who is one of the specialized portfolio managers at global asset management giant Franklin Templeton, jointly managing this approximately $1.4 billion emerging markets equity fund. He has held these two memory chip stocks since 2015 and his bullish conviction has grown stronger and more long-term. "Furthermore, based on information I've gathered, some U.S. tech clients indicate the memory industry is only in the second year of a ten-year super upgrade cycle," he said in a media interview. "However, the sheer scale of the unprecedented recent gains in the memory space is enough to give investors pause," said Mark Bronzo, chief investment strategist at Rye Strategic Partners. He agrees that memory stocks deserve higher multiples and believes the group still has strong bullish upside over time, but he also urges near-term caution. "The consensus view now is: you have to own these stocks, and that can be dangerous," he said. "Nevertheless, memory chip/storage product prices are set to remain strongly upward, which will support their earnings foundation. The fundamentals look so strong that I don't know who the seller would be. Whenever they see weakness, I think any pullback will be completely absorbed by dip-buying."
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