Analysts abandon long-held cyclical skepticism as AI demand drives sustained gains in memory and storage stocks.
A Wall Street firm has set unprecedented price targets for Micron (MU) and SanDisk (SNDK), defying decades of cyclical valuation patterns in the memory chip sector. The move reflects growing confidence that artificial intelligence demand will sustain elevated pricing and earnings for DRAM and NAND flash producers.
Historically, memory stocks have been treated as highly cyclical, with valuations collapsing during supply gluts. Analysts typically avoided paying premiums for earnings expected to evaporate. This week’s targets break from that tradition, signaling a structural shift in market perception.
Micron and SanDisk benefit from AI’s voracious appetite for memory and storage. Training and running large AI models require massive pools of both DRAM and NAND, reducing the sector’s exposure to traditional boom-bust cycles. The new targets suggest investors may no longer dismiss memory stocks as purely speculative plays.