Memory chip supply crunch will last 2 more years, JPMorgan warns
Brian Sozzi· Executive Editor
Mon, 10 August 2026 at 6:37 pm GMT+5:30
2 min read
- JPM
+0.63%
The AI-driven memory chip crisis has a ways to go before its status is downgraded to business as usual
The call
JPMorgan strategist Jay Kwon is making a double bullish call on the entire memory space
First, Kwon thinks the memory chip crisis is far from over
“Higher memory total addressable market driven by both pricing and volume, S-D shortage continues for the next two years,” Kwon wrote in a note on Monday. “Memory demand broadening out from GPU to CPU appears to have been underestimated by investors (conceptually well known but actual S-D impact underlooked) and remains a key
Second, with the crisis rolling on, Kwon thinks the summer swoon in memory stocks has ended
“3Q26 will likely be an expectation reset quarter, but we remain bullish on memory,” he wrote. “After a strong four quarters of outperformance over the overall AI ecosystem, memory shares experienced a 25% correction in 3Q26 to date largely due to a peak-out sentiment amidst: a) series of near-term EPS expectation misses; b) slower-than-expected CSP AI capex spending; and c) mainstream memory content optimization. We acknowledge that the road to a valuation re-rating will take time relative to upward EPS revisions, driven by share appreciation; however, we see strong upside to memory stock prices trading at earnings and P/E valuation metric on a smoothening earnings trajectory from LTA and a higher shareholder return profile.”
Kwon is bullish on Korean memory stocks — Micron (MU) in the US, Kioxia (KI5.F) in Japan, and Winbond (2344.TW) in Taiwan
AlphaSpace stat to know: 202%
Micron shares have exploded 202% this year compared to a 13% advance for the S&P 500 (^GSPC), per Yahoo Finance AlphaSpace data. The stock has corrected this summer, however, dropping 10% in the past month on overvaluation fears
The bottom line
The CEO of memory chip play Sandisk (SNDK) perhaps put it best on his earnings call last week about the state of the market
“We spent a lot of time over the last two or three quarters really working very deeply with our largest customers on committing demand,” Sandisk CEO David Goeckeler said. “We have over four years of visibility now. We feel very good about where the franchise is.”
That’s a lot of business visibility, largely because the memory crisis is unlikely to abate anytime soon. It may even last longer than JPMorgan’s call expects
Brian Sozziis Yahoo Finance’s Executive Editor, host of thePower Players with Brian Sozzipodcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X@BrianSozzi,Instagram, andLinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com
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