Key Takeaways
- Mizuho’s Jordan Klein characterizes recent memory stock declines as cyclical corrections that historically present buying opportunities
- Micron’s current 17% retreat from recent peaks aligns with six previous corrections ranging from 14–21% observed since mid-2025
- Samsung, SK Hynix, SanDisk, ASML, Applied Materials, and Lam Research top Klein’s recommended stock list
- Morgan Stanley’s Joseph Moore identifies memory as “the primary constraint on AI demand,” suggesting current valuations are excessive
- Analysts anticipate substantial upside in these equities over the next several months, underpinned by artificial intelligence memory requirements
Those tracking the recent decline in memory-related equities might be overreacting, suggest two prominent Wall Street researchers who view the current weakness as part of a predictable cycle.
In a Thursday research note, Mizuho technology analyst Jordan Klein observed that “memory long trade is starting to wobble big time” following sustained strength throughout 2025 and into early 2026.
Yet Klein maintains an optimistic stance. He characterizes these periodic pullbacks as routine occurrences rather than indicators of a fundamental shift.
“Not a signal of peak nor any reason to dump,” Klein stated. “Actually you make money buying these dips.”
Micron Technology has declined approximately 17% from its peak following earnings. Klein notes this correction falls squarely within historical parameters, mirroring six previous drawdowns of 14–21% documented since mid-2025.
Despite this recent turbulence, the equity has appreciated over 200% during the same timeframe.
Klein attributes the intensified selling pressure to momentum-driven traders, suggesting the market reaction exceeds fundamental deterioration. He views the current skepticism as constructive for the 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 premier selection among memory producers. He also maintains positive views on SK Hynix and SanDisk.
However, he suggests equipment manufacturers represent the most attractive risk-reward profile. Klein designates ASML as his preferred choice in this segment, with Applied Materials and Lam Research following closely.
He contends these firms are strategically positioned to capitalize on expanding DRAM capacity investments.
Klein expressed confidence that “in 3–6 months they are all higher.”
Morgan Stanley: Memory Capacity Limits AI Expansion
Morgan Stanley’s Joseph Moore shared comparable sentiments in a Wednesday report. He characterized the recent selloff as “a healthy pricing in of durability concerns” while rejecting narratives of weakening fundamentals.
Moore emphasized to clients that memory availability is “increasingly THE primary constraint on AI demand.” This framework casts memory not merely as an AI beneficiary, but as a critical limiting factor for industry growth.
He specifically addressed Google’s “TurboQuant” memory efficiency initiative. Following consultations with industry sources, Moore concluded it represents “an evolutionary development, with basically no surprises for memory.”
Moore also spotlighted the cash generation capacity at Micron and SanDisk. He projects annual cash flow at present earnings rates 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 affirmed.
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