Memory chip stocks rallied Monday after Mizuho Securities and Bank of America issued bullish upgrades, citing an AI-driven supply-demand imbalance that is expected to persist until at least 2028. SanDisk (SNDK) jumped nearly 5% to $1,638, rebounding from an 11% drop on Friday, while peers Seagate Technology (STX) and Western Digital (WDC) also gained.
Mizuho analyst Vijay Rakesh raised his price target on SanDisk to $2,200 from $1,825, maintaining an Outperform rating. Bank of America’s Wamsi Mohan lifted his target to $2,100 from $1,550, keeping a Buy rating. The same bullish view extended across the sector: Mizuho hiked its Seagate target to $1,090 (from $875) and Western Digital target to $685 (from $550), all with Outperform ratings.
Multiyear contracts and tight supply are key to the optimism. SanDisk has locked in over one-third of its estimated fiscal 2027 revenue through multiyear “new business model” (NBM) agreements that maintain margins even if pricing falls. Meanwhile, NAND flash wafer starts are projected to decline in 2026 and only edge up in 2027, with no meaningful new supply coming online until 2028. DRAM demand is seen growing 27% year-over-year in 2026 and 24% in 2027, while NAND demand is forecast to rise 18% annually across both years.
The AI catalyst extends beyond memory makers. Mizuho’s quarterly AI ASIC roadmap call highlighted Google’s Tensor Processing Unit (TPU) shipments potentially surging to over 35 million units in 2028, up from roughly 4.3 million in 2026. Broadcom (AVGO) could benefit from up to 50 million total TPU shipments between 2026 and 2028, plus tailwinds from Meta’s MTIA accelerators and OpenAI’s upcoming ASIC. Mizuho raised its Broadcom AI revenue estimate for 2027 to $122 billion and introduced a 2028 estimate of $170 billion. The firm noted that concerns about ASIC vs. GPU competition are “overblown.”
Micron Technology (MU) rose about 8% on the day, while Western Digital and Seagate added roughly 4% and 3.3%, respectively. The broader market fell, with the Nasdaq down 4.2%, making the memory sector’s stand-out performance particularly notable.
