Citrini Analyst: AI Era May Alter Storage Cycle Logic, Chip Stock Decline Does Not Necessarily Mean Industry Collapse
Citrini analyst Jukan posted an analysis pointing out that the recent decline in memory chip stocks, besides being affected by leveraged fund liquidations, may also indicate the market is pricing in pressure from future supply expansion in advance. Even if the global memory shortage continues until 2027, most research institutions and industry observers still expect supply-demand tightness to begin easing in 2028. As memory manufacturers such as Samsung Electronics and SK Hynix announce large-scale fab expansion plans, the market may have already started to reflect in advance the impact of new capacity release after 2028.
There is a common rule in the traditional memory industry: memory stock prices usually reflect memory price peaks about two quarters in advance, but in the new AI-driven cycle, the market might price in future supply-demand changes even earlier, such as three or even four quarters in advance. The AI era may bring new changes; the logic of "price cuts leading to revenue decline" in traditional memory cycles may not fully apply to the AI infrastructure market.
Jukan stated that the key difference lies in the fact that in the AI era, "demand growth driven by price declines" may buffer the impact of the memory price cycle downturn. If this logic holds, future earnings volatility for memory companies may be lower than in past cycles, and may also support higher valuation levels.