Analysts See AI-Driven Buying Opportunity in Memory Stocks

Key Moments

Memory Names Rally in Premarket Trade

Investing.com — Shares of major memory and storage companies moved higher in premarket trading on Monday after a series of upbeat analyst reports highlighted potential upside in pricing and sustained demand tied to artificial intelligence.

Micron Technology Inc (NASDAQ:MU) climbed 2.2%, SanDisk Corp (NASDAQ:SNDK) rose 3.6%, Western Digital Corp (NASDAQ:WDC) advanced 3.4%, and Seagate Technology Holdings PLC (NASDAQ:STX) gained 1.8%.

Analysts pointed to both a more constructive outlook for memory pricing and expectations that AI-related workloads will continue to drive robust demand for DRAM and storage.

UBS Lifts DDR Pricing and Revenue Projections

UBS analyst Nicolas Gaudois issued a positive update on the memory industry, raising his baseline expectations for DDR contract pricing and signaling a prolonged period of tight supply.

Gaudois said he continues to forecast the DRAM market to remain undersupplied “until at least 2Q28,” noting that the expected gap between bit demand growth of 36.2% in 2027 and supply growth of 19.3% is “too wide to close by then.”

UBS projected that total memory industry revenues will reach $992 billion in 2026 and $1.76 trillion in 2027. The firm described the recent weakness in memory shares – which are down an average of 17% from their June peak – as “likely temporary.”

Citi Highlights Micron as Near-Term Catalyst Play

Citi turned more constructive on Micron, placing the stock on an upside 90-day catalyst watch. The bank raised its expectations for Micron’s average selling price growth for the second, third, and fourth quarters of 2026, citing improving AI CPU-related demand.

Citi tied its more optimistic stance on Micron’s pricing outlook to stronger demand trends for AI CPUs, which are expected to pull through additional memory content.

BofA Reaffirms Bullish View on Micron and AI Infrastructure Spending

Bank of America analyst Vivek Arya reiterated a Buy rating on Micron and maintained a $1,550 price target, underscoring the increasing role of memory in AI-related capital spending. Arya argued that “memory now represents roughly 35-40% of cloud AI capex, 2-3x vs. historical levels, yet memory stocks trade at sub-par 10x forward PE.”

Arya anticipates that global cloud and AI infrastructure capital expenditures will approach $1.5 trillion by 2027. He characterized the current pullback across semiconductors as “a healthy reset, not a structural change in AI demand.”