Memory stocks rebound as analysts flag a buying opportunity

Investing.com -- Memory and storage stocks are climbing in premarket trading on Monday, with Micron up 2.2%, SanDisk gaining 3.6%, Western Digital rising 3.4% and Seagate adding 1.8%, as bullish analyst notes pointed to pricing upside and durable AI-driven demand.

UBS analyst Nicolas Gaudois raised his base-line DDR contract pricing forecasts to +32% quarter-on-quarter in the third quarter of 2026, up from a prior estimate of +17%, and +18% in the fourth quarter, up from +12%.

Gaudois said he continues to forecast the DRAM industry to be undersupplied "until at least 2Q28," with the gap between bit demand growth of 36.2% in 2027 and supply growth of 19.3% "too wide to close by then."

UBS forecast memory industry revenues reaching $992 billion in 2026 and $1.76 trillion in 2027, describing the current pullback in memory stocks, down an average of 17% from their June peak, as "likely temporary."

Meanwhile, Citi added an upside 90-day catalyst watch on Micron, raising its second, third, and fourth quarter 2026 average selling price growth estimates to +44%, +20%, and +13% quarter-on-quarter, respectively, citing stronger AI CPU demand.

Bank of America analyst Vivek Arya reiterated his Buy rating on Micron with a $1,550 price target, arguing 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 expects global cloud and AI infrastructure capital expenditure to approach $1.5 trillion by 2027, describing the current semiconductor pullback as "a healthy reset, not a structural change in AI demand."

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