#BernsteinSaysMemoryBullMarketToLastUntil2027

The AI Memory Boom Isn’t Ending - It’s Entering a More Mature Phase. Memory stocks, and they’ve been the AI trade’s biggest winners over the last year. Now, Bernstein analysts think the cycle could persist well into 2027, but there’s an important twist: the era of eye-watering growth might be giving way to more sustainable gains. It actually makes sense to me.

After all, it’s unlikely DRAM prices can keep surging more than 70% a quarter, forever.

Markets just don’t work that way. Instead, Bernstein says, what looks like slowing growth could just be a healthy sign of an industry moving from shortages to supply-demand equilibrium. At the core of it, though, AI remains the demand driver. Companies running hyper-scale cloud infrastructure continue to throw hundreds of billions into high-performance chips for the next-generation AI model infrastructure, and each AI application requires ever-more memory, whether it’s in chips that serve as memory for graphics cards, known as GPUs, or storage drives, known as NAND.

In other words, without ample supplies of this memory technology, AI wouldn’t function at all, and so those chip makers have become essential links in the ecosystem.

I’m particularly watching the divergence in enterprise demand and consumer demand. Even if smartphone and consumer electronics demand begins to stagnate, I’d imagine AI servers don’t operate with that same, kind of cyclical pattern. As long as the hyperscalers are willing to keep adding capacity, you can continue to grow even if consumers aren’t as enthusiastic about upgrading.

For me personally, I think that where it will matter even more now than perhaps it’s mattered in the past year will be stock selection versus just throwing money at the theme. The companies that have good customer relationships, advanced technology and manufacturing, and good long-term supply arrangements will do best. In other words, I think the easy money from the AI boom is likely behind us and the next phase of the stock will reward a little bit more consistency.

The AI story is ongoing, but perhaps it’s a more mature one than perhaps it looked to be at the start of this rally.

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