Bernstein raises target prices for Samsung, SK Hynix, and Micron, warning that storage price increases are driving up AI costs

BlockBeats News, June 22 — Wall Street investment bank Bernstein stated that storage chip price increases are spreading from consumer electronics to AI infrastructure and may force large cloud providers to reassess the return on investment for AI data centers.

In a report released on June 22, Bernstein said that traditional DRAM prices have increased approximately 4.5 times since the third quarter of 2025, while HBM prices have not yet been adjusted in sync due to annual contract lock-in. This has resulted in significantly higher unit wafer revenue and gross margins for traditional DRAM compared to HBM, prompting storage manufacturers to renegotiate HBM prices for 2027 with GPU/XPU vendors. The firm expects HBM prices could rise by 2 to 2.5 times next year.

The report states that the HBM price increase could be further amplified by AI accelerator manufacturers. Taking Nvidia as an example, if it wants to maintain a 75% gross margin after HBM cost increases, it may need to pass on related costs to customers at about four times the current rate. Bernstein estimates that in the Vera Rubin NVL72 rack, HBM price hikes and markups could increase total capital expenditure for AI data centers by about 15%; combined with rising traditional DRAM and NAND prices, the total impact could approach 30%.

Bernstein believes that cloud providers will continue investing in AI, but rising costs mean that "recalibration" is inevitable, and pricing in the supply chain, customer cost sharing, and even token prices may face adjustments.

The firm maintains "Outperform" ratings for Samsung Electronics, SK Hynix, and Micron, and significantly raises target prices: Samsung common stock from 225,000 KRW to 440,000 KRW, SK Hynix from 1,150,000 KRW to 3,300,000 KRW, and Micron from $510 to $1,300. Bernstein’s 2027 EPS forecasts for the three companies are approximately 26%, 32%, and 38% above market consensus expectations.

The report also states that Samsung may have gained an edge in HBM4 technology and could expand its market share. However, an increased proportion of HBM does not necessarily lead to higher profits, as current traditional DRAM remains more profitable.

Bernstein maintains a "Underperform" rating for KIOXIA due to its lack of HBM business; at the same time, it reaffirms "Outperform" for MediaTek, believing that if cloud providers switch to directly purchasing HBM to avoid GPU/XPU vendors raising prices, Asian ASIC service providers could benefit.

The report warns that a cycle downturn could still occur in 2028. But even if prices normalize, Bernstein expects the gross margin for the DRAM industry could remain around 70%, higher than most peak levels in past up cycles.