#分享美股交易赢英伟达股票 How much farther can the storage bull market run? Morgan Stanley: Supply and demand remains tight for another 2–3 years, Micron/SanDisk view

Morgan Stanley released a storage-chip report on June 3. Its core conclusion is that the DRAM and NAND supply-demand imbalance cannot be quickly resolved, and shortages may persist for another 2–3 years or even longer.
DRAM has become the biggest bottleneck for building AI computing power, and large-scale customers’ willingness to pay remains high. Morgan Stanley substantially raised its earnings forecasts and target prices for Micron (MU) and SanDisk (SNDK). Micron’s target price was doubled from $520 to $1,050, and SanDisk’s was raised from $1,100 to $1,750—both maintained at an Overweight rating.
Here are the key points below:
1. DRAM shortages have no quick fix; supply growth is constrained
DRAM has become the main bottleneck for AI buildout. Shortages of cleanroom facilities and EUV equipment limit supply growth, while the wafer consumption intensity of HBM further squeezes traditional DRAM capacity.
Morgan Stanley expects DRAM pricing to rise 40% quarter-over-quarter in the May quarter and another 15% in the August quarter. While this is lower than the 20%+ increase range suggested by supply-chain feedback, it is still very strong.
Micron’s CY26/CY27 EPS forecasts were raised by 4%/48%, with CY27 EPS expected to reach $113.85. Based on the current stock price, the P/E ratio remains below 10x.
2. NAND is also tight; SanDisk benefits from enterprise SSD demand
AI inference demand is reshaping the NAND market structure, with large-scale customers locking in large volumes of high-performance NAND. SanDisk’s joint-venture partner Kioxia (Kioxia) only slightly adjusted its long-term bit-growth expectation from 20% to 22%. Capital expenditures are kept low (about $4.7 billion per year), leaving limited supply incremental growth.
Morgan Stanley raised SanDisk’s CY26/CY27 EPS forecasts by 12%/24%. CY27 EPS is expected to reach $208. Even with a target price of $1,750, the implied P/E is still under 10x.
3. Long-term contracts are a “symptom,” not the “root cause”
Market attention focuses on multiple long-term supply agreements (LTA). Morgan Stanley believes LTAs are a necessary condition for customers to ensure supply, showing that large-scale customers are willing to continue expanding their storage procurement over the coming years rather than being the core driver of price increases. The real driving force remains the imbalance between supply and demand.
4. Accelerating capital returns: share buybacks set to restart
Previously, Micron was unable to repurchase shares due to CHIPS Act restrictions. It is expected to begin large-scale buybacks starting FY27. Morgan Stanley’s model shows buybacks of about $50 billion in FY27–28. SanDisk’s free cash flow conversion rate has historically been higher as well, and it also benefits.
5. Valuation still has room to improve
Micron’s target price is based on 29.5x long-term cycle EPS ($35), while SanDisk’s is based on 28x cycle EPS ($62.5). Both are in line with the semiconductor industry average. However, the current stock price still implies a P/E of less than 10x versus CY27 EPS. Morgan Stanley believes the market has not fully priced in the sustainability of earnings and the opportunity for multiple rounds of upward revisions.
Summary: Storage chips are in a historically severe shortage cycle. AI-driven demand is structurally lifting the earnings “profit center,” while supply-side capacity expansion is constrained—making the period of high profitability last longer than expected.
Micron and SanDisk’s current valuations remain attractive. Re-negotiations of HBM contracts in the second half of the year and the restart of buybacks are expected to become new catalysts. The risk is that if demand falls, high inventories could trigger a rapid decline in prices.
All of the above content comes from Morgan Stanley’s research report and does not constitute investment advice.
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