Citrini analyst Jukan suggests that the recent decline in memory chip stocks is not necessarily indicative of an industry collapse. The downturn, influenced by leveraged fund liquidations, may also reflect market anticipation of future supply pressures. Despite a global memory shortage expected to last until 2027, supply-demand tightness is projected to ease by 2028 as manufacturers like Samsung and SK Hynix expand production.
Jukan highlights that in the AI-driven market, traditional cycles where memory stock prices peak two quarters ahead may shift, with the market potentially pricing in changes three to four quarters in advance. The AI era could alter the traditional "price cuts leading to revenue decline" logic, as demand growth driven by price reductions might mitigate the impact of price cycle downturns. This could result in lower earnings volatility and support higher valuations for memory companies.
AI Era May Shift Memory Chip Market Dynamics, Says Citrini Analyst
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