Wall Street analysts from Mizuho and Morgan Stanley are advising investors that the recent sharp selloff in memory chip stocks represents a strategic buying opportunity, not a signal of a peak cycle. The downturn, which has seen shares of companies like Micron Technology fall roughly 17-22% from recent highs, fits a historical pattern of periodic pullbacks amidst a long-term bullish trend driven by artificial intelligence demand.
Mizuho analyst Jordan Klein noted in a client note that the "memory long trade is starting to wobble big time" after a strong run, but emphasized these corrections happen every few months. He pointed out that Micron's current drop aligns with six prior dips of 14–21% since mid-2025, a period during which the stock still gained over 200%. "Not a signal of peak nor any reason to dump," Klein wrote. "Actually you make money buying these dips." His top picks include Samsung Electronics and SK Hynix, but he sees the strongest opportunity in equipment suppliers like ASML, Applied Materials, and Lam Research, which are poised to benefit from rising DRAM capacity additions. Klein expressed high confidence that these stocks will be "materially higher" in the next 3–6 months.
Morgan Stanley analyst Joseph Moore reinforced this view, arguing that comparisons to past memory cycles "misses the point." He stated that memory supply is "increasingly THE primary constraint on AI demand," positioning it as a critical bottleneck rather than just a beneficiary. Moore directly addressed concerns sparked by Google's "TurboQuant" memory optimization project, concluding after industry checks that it is "an evolutionary development, with basically no surprises for memory" and is unlikely to materially reduce overall demand due to fixed capacity constraints in high-bandwidth memory.
The analysts highlighted the sector's robust fundamentals. Moore noted that at current earnings levels, companies like Micron and SanDisk could generate annual cash flow equivalent to 15–25% of their market caps. Furthermore, major hyperscalers like Amazon and Google are expected to spend around $650 billion this year on data centers and related technologies, underpinning sustained demand. Wedbush analysts suggested some memory prices could surge by more than 100% amid ongoing imbalances.
