AI Demand and Pricing Outlook Lift Sector Sentiment
Memory and storage stocks moved higher in premarket trading on Monday after several analysts pointed to improving pricing trends and continued artificial intelligence demand as reasons for renewed optimism across the sector.
Micron (NASDAQ:MU) rose 2.2%, SanDisk (NASDAQ:SNDK) gained 3.6%, Western Digital (NASDAQ:WDC) advanced 3.4%, and Seagate (NASDAQ:STX) added 1.8% before the opening bell.
UBS Sees Tight Memory Supply Through 2028
UBS analyst Nicolas Gaudois increased his baseline forecast for DDR contract pricing, now expecting prices to rise 32% quarter over quarter in the third quarter of 2026, up from his previous estimate of 17%. His fourth-quarter forecast was also lifted to 18% from 12%.
Gaudois believes the DRAM market will remain undersupplied “until at least 2Q28,” arguing that projected bit demand growth of 36.2% in 2027 significantly exceeds expected supply growth of 19.3%, leaving “too wide to close by then.”
UBS now projects global memory industry revenue to reach $992 billion in 2026 before climbing to $1.76 trillion in 2027.
The brokerage also described the recent decline in memory shares, which have fallen by an average of 17% from their June highs, as “likely temporary.”
Citi Turns More Positive on Micron
Citi added Micron to its 90-day upside catalyst watch list while increasing its average selling price growth forecasts for the second, third and fourth quarters of 2026 to 44%, 20% and 13% quarter over quarter, respectively.
The brokerage cited strengthening demand for AI processors as a key driver behind the more optimistic outlook.
Bank of America Sees Long-Term AI Opportunity
Bank of America analyst Vivek Arya reiterated his Buy rating on Micron and maintained a price target of $1,550.
Arya argued that “memory now represents roughly 35-40% of cloud AI capex, 2-3x vs. historical levels, yet memory stocks trade at sub-par 10x forward PE.”
He also forecasts global spending on cloud computing and artificial intelligence infrastructure to approach $1.5 trillion by 2027, describing the recent weakness across semiconductor stocks as “a healthy reset, not a structural change in AI demand.”