Investing.com -- In a note on Monday, Citi flagged two key memory names as beneficiaries of a sharp rise in demand for enterprise solid-state drives, driven by artificial intelligence.

Samsung Electronics and SK Hynix are the stocks in question.

The bank said "continual learning and AI inference are set to drive a sharp increase in eSSD demand," which it forecasts will grow 52.9% year over year in 2027.

It expects total SSD demand to rise 45%, with strong growth in QLC storage as AI systems require larger data pools closer to accelerators.

Citi notes that demand for advanced storage should keep expanding as continual learning, which requires AI systems to keep absorbing new information while retaining old data, grows more sophisticated, lifting the need to preserve and retrieve large volumes of historical data.

While consumer NAND demand could soften amid weaker mobile and PC markets, the bank said that "strong enterprise AI demand should offset softer consumer NAND demand."

It also noted AI data centers, particularly in China, are increasingly favoring SSDs over hard disk drives.

With memory makers prioritizing DRAM and high-bandwidth memory capacity over NAND, Citi expects supply-demand conditions to tighten materially, projecting NAND deficits of 6.1% in 2027 and 5.5% in 2028, from just 0.8% this year.

The bank reiterated Buy ratings on Samsung Electronics and SK Hynix, saying both are well positioned to benefit from tighter NAND fundamentals and structural AI-driven memory demand.