Analyst Jukan said storage and compute cycles are likely to tighten or loosen together, arguing that compute cannot remain in shortage while storage alone shifts into oversupply. He also said the case for shorting storage while going long hard drives does not hold, because hard drives are tied to the same cycle and would not remain safe if the current cycle rolls over.

According to ChainCatcher, Jukan said the market has no clear view beyond 2027. He noted that prices have historically peaked one to two quarters before supply expands, followed by shipment growth and shrinking profit pools.

He said this cycle differs from those for personal computers, smartphones, and general-purpose servers because it does not use standardized products and has different triggers. Jukan added that some investors still price storage using old assumptions about rising-cycle gains and falling-cycle losses, which has left valuations depressed.

He said a sharp collapse like those seen in the past is unlikely to repeat, though a gradual decline is possible. Even if Samsung and SK Hynix saw margins cut in half from current levels, he said their price-to-earnings ratios could still remain in the teens, about half the valuation of hard drive companies.

Jukan also said that when storage prices fall, other demand will step in at each price level, including personal AI demand driven by local AI. He said local AI will struggle to spread if storage prices pushed up by hyperscale cloud providers are not contained. Drawing a parallel with the shift from mainframes to personal computers and from cloud to smartphones, he expects the current AI cycle to move from frontier labs to local open-source AI, which he said could absorb storage demand. He added that storage prices will not stay elevated for more than 10 years and will eventually decline, but new consumer demand such as open-source-driven local AI may provide a floor.