Key Takeaways
- Mizuho’s Jordan Klein characterizes recent memory stock declines as routine cyclical pullbacks that present purchasing opportunities
- Micron has declined approximately 17% from recent post-earnings peaks, consistent with six previous corrections ranging from 14–21% since mid-2025
- Klein highlights Samsung, SK Hynix, SanDisk, ASML, Applied Materials, and Lam Research as preferred investment selections
- Morgan Stanley’s Joseph Moore characterizes memory as “the primary constraint on AI demand,” suggesting current valuations are excessive
- Both financial analysts anticipate significantly higher stock valuations in coming months, driven by AI-related memory requirements
Market participants concerned about this week’s decline in memory semiconductor stocks may be overreacting, according to assessments from two prominent Wall Street analysts who view the current weakness as part of an established cyclical pattern.
In a Thursday research note, Mizuho technology analyst Jordan Klein observed that the “memory long trade is starting to wobble big time” following robust performance throughout 2025 and into early 2026.
However, Klein maintains an optimistic outlook. He characterizes these periodic pullbacks as recurring phenomena rather than indicators of market exhaustion.
“Not a signal of peak nor any reason to dump,” Klein stated. “Actually you make money buying these dips.”
Micron Technology has experienced approximately a 17% decline from its post-earnings highs. Klein notes this correction aligns with six previous drawdowns ranging between 14–21% observed since mid-2025.
Despite this recent volatility, the equity has still generated returns exceeding 200% during the same timeframe.
Klein attributes the selling pressure to momentum-driven traders, arguing their activity creates an exaggerated impression of underlying weakness. He contends that prevailing market skepticism actually supports a constructive investment thesis.
“What is worse is when everyone is all on the same side,” he noted.
Equipment Manufacturers Present Compelling Value Proposition
Klein identifies Samsung Electronics as his preferred individual selection within the memory chip sector. He also maintains positive outlooks for SK Hynix and SanDisk.
However, he believes equipment manufacturers represent the most attractive opportunity. Klein designates ASML as his top equipment pick, with Applied Materials and Lam Research also featured prominently.
He contends these corporations are strategically positioned to capitalize on expanding DRAM capacity investments.
Klein stated he remains “very confident that in 3–6 months they are all higher.”
Morgan Stanley: Memory Represents Critical AI Infrastructure Constraint
Morgan Stanley analyst Joseph Moore expressed a comparable perspective on Wednesday. He characterized the recent selloff as “a healthy pricing in of durability concerns” while rejecting suggestions that sector momentum is deteriorating.
Moore informed clients that memory supply has become “increasingly THE primary constraint on AI demand.” This characterization positions memory not merely as benefiting from AI expenditures, but as a fundamental limiting factor.
He specifically addressed Google’s “TurboQuant” memory optimization initiative. Following consultations with industry sources, Moore concluded it represents “an evolutionary development, with basically no surprises for memory.”
Moore also emphasized the substantial cash generation capabilities at Micron and SanDisk. He projects that annual cash flow at present earnings levels could represent 15–25% of their respective market capitalizations.
“While it won’t last forever, it is going to last for long enough to see the stocks move materially higher,” Moore concluded.
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