Morgan Stanley: Memory correction bottomed. Next leg = buybacks.
July selloff priced in a downturn that never came. Earnings revision breadth peaked in late June while stocks dumped. Memory now trades at ~3x NTM P/E, pricing in an EPS decline that hasn't happened.
Pricing still rising, just decelerating:
- 3Q26 DRAM contracts +15% QoQ
- NAND +20% QoQ
(down from +45-50% surge)
Cycle is late, not over.
Once the market realizes earnings stabilized and prices keep climbing, July fear evaporates. Buyers rotate back in.
Next catalyst: Buybacks.
Every major supplier locked long-term contract volumes. Locked demand + rising FCF = capital returns unlocked.
Samsung, SK Hynix, $MU, SanDisk, Kioxia all disclosed figures on recent earnings calls.
Memory names about to rip on buyback flows.
July selloff priced in a downturn that never came. Earnings revision breadth peaked in late June while stocks dumped. Memory now trades at ~3x NTM P/E, pricing in an EPS decline that hasn't happened.
Pricing still rising, just decelerating:
- 3Q26 DRAM contracts +15% QoQ
- NAND +20% QoQ
(down from +45-50% surge)
Cycle is late, not over.
Once the market realizes earnings stabilized and prices keep climbing, July fear evaporates. Buyers rotate back in.
Next catalyst: Buybacks.
Every major supplier locked long-term contract volumes. Locked demand + rising FCF = capital returns unlocked.
Samsung, SK Hynix, $MU, SanDisk, Kioxia all disclosed figures on recent earnings calls.
Memory names about to rip on buyback flows.