Citrini analyst: In the AI era, the logic of storage cycles may change; a drop in chip stocks doesn’t necessarily mean the industry is collapsing

Odaily Planet Daily reports that Citrini analyst Jukan posted an analysis saying that the recent decline in memory chip stocks may be driven not only by leveraged fund liquidation, but also by the market starting to price in pressure from future supply expansion in advance. Even if the global memory shortage continues through 2027, most research institutions and industry observers still expect tight supply and demand to begin easing in 2028. With storage manufacturers such as Samsung Electronics and SK hynix announcing large-scale fab expansion plans, the market may already be reflecting in advance the impact of new capacity coming online after 2028.

There is a common rule in the traditional storage industry: storage stock prices typically reflect storage prices peaking about two quarters earlier, but in the AI-driven new cycle, could the market potentially price it in for longer—such as three or even four quarters—regarding future changes in supply and demand. The AI era may bring new dynamics, and the logic from traditional storage cycles—“price cuts lead to revenue declines”—may not fully apply to the AI infrastructure market.

Jukan said the key difference is that in the AI era, “demand growth resulting from price declines” may cushion the downward impact on the storage price cycle. If this logic holds, future earnings volatility for storage companies may be lower than in past cycles, and it may also support higher valuation levels.