Key Takeaways
- Mizuho’s Jordan Klein characterizes recent memory stock corrections as routine fluctuations that have consistently presented profitable entry points
- Micron Technology has declined approximately 17% from recent peaks, matching the pattern of six previous corrections ranging from 14–21% since mid-2025
- Klein highlights Samsung, SK Hynix, SanDisk, ASML, Applied Materials, and Lam Research as preferred investments
- Morgan Stanley analyst Joseph Moore identifies memory as “the primary constraint on AI demand,” suggesting current valuations are excessive
- Both firms anticipate significantly higher valuations in coming months, underpinned by robust AI-related memory requirements
Investors concerned about this week’s decline in memory semiconductor stocks may be overreacting, according to a pair of prominent Wall Street analysts who view the correction as part of an established cyclical pattern.
In a Thursday research note, Mizuho technology analyst Jordan Klein acknowledged that the “memory long trade is starting to wobble big time” following an impressive rally throughout 2025 and into early 2026.
Yet Klein remains firmly optimistic. He characterizes these periodic retreats as normal occurrences rather than warning signs of deteriorating fundamentals.
“Not a signal of peak nor any reason to dump,” Klein stated. “Actually you make money buying these dips.”
Micron Technology has experienced roughly a 17% decline from its earnings-related highs. Klein notes this correction aligns closely with six comparable pullbacks ranging between 14–21% observed since the middle of 2025.
Despite these periodic setbacks, the equity has still delivered gains exceeding 200% during this timeframe.
Klein attributes the intensified selling to momentum-driven traders, suggesting the current negativity appears disproportionate to underlying fundamentals. He contends that prevailing skepticism actually strengthens the investment thesis.
“What is worse is when everyone is all on the same side,” he noted.
Equipment Manufacturers Present Most Attractive Risk-Reward Profile
Klein identifies Samsung Electronics as his preferred individual selection among memory producers. He also maintains constructive views on SK Hynix and SanDisk.
However, he believes semiconductor equipment providers represent the most compelling opportunity. Klein designates ASML as his premier choice in this category, with Applied Materials and Lam Research close behind.
He contends these manufacturers are optimally positioned to capitalize on expanding DRAM capacity investments.
Klein expressed being “very confident that in 3–6 months they are all higher.”
Morgan Stanley: Memory Represents Critical AI Infrastructure Constraint
Morgan Stanley’s Joseph Moore advanced comparable conclusions in Wednesday commentary. He characterized the selloff as “a healthy pricing in of durability concerns” while rejecting narratives suggesting weakening momentum.
Moore informed clients that memory availability has become “increasingly THE primary constraint on AI demand.” This perspective positions memory not merely as benefiting from artificial intelligence expenditures, but as an essential limiting factor.
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 emphasized the substantial cash generation capabilities at Micron and SanDisk. He projected that annual free cash flow at present profitability levels could represent 15–25% of their total market capitalizations.
“While it won’t last forever, it is going to last for long enough to see the stocks move materially higher,” Moore concluded.
