Morgan Stanley: Short-Term Correction in Storage, But 2027 Earnings Still Expected to Grow 35%-40%

According to TechFlow Research, Morgan Stanley's July 6 Asia-Pacific Memory Technology Flash Note pointed out that memory is approaching the peak rate of change in year-over-year prices, inventory, and the breadth of earnings revisions; short-term stock prices may face pressure, but the AI-driven memory bull market is far from over, with industry profits expected to grow by 35% to 40% by 2027. Market concerns about compute surplus among top cloud vendors may be overinterpreted; the true direction depends on whether hyperscalers maintain capital expenditure during the Q2 earnings season. Stock prices were not revalued after the announcement of Long-Term Agreements, reflecting the market's memory of LTAs becoming inventory burdens during the pandemic; actual execution needs to be seen rather than the agreements themselves. Morgan Stanley suggests seeking opportunities in DRAM and traditional memory, avoiding module manufacturers. Samsung Electronics' Q2 operating profit is expected to be about 85 trillion won, SK Hynix about 65 trillion won, both in line with market expectations.