Morgan Stanley
2026-06-12
Memory – A Healthy Reset
Report Summary
Morgan Stanley argues the DRAM sector is undergoing a healthy correction rather than a cyclical downturn, with DRAM stocks falling ~15% from recent highs after a sharp rally. The report highlights that AI demand for DRAM remains robust heading into 2027, with 70% of DRAM stocks trading below their 200-day moving average suggesting attractive entry points. SK Hynix trades at 5.2x forward P/B with potential 134% upside, while historical KOSPI event analysis shows 87.5% positive hit rate on first trading day after major market shocks.
Key Takeaways
- DRAM stocks corrected ~15% from recent highs, with 70% now trading below their 200-day moving average — historically a strong buy signal
- AI DRAM demand outlook remains strong into 2027, with AI agent adoption driving additional demand from 2026
- SK Hynix valued at 5.2x forward P/B (vs benchmark 4.7x) with potential 134% upside and 175% at peak
- 2026 DRAM contract prices expected to decline 20-30%, but 2027 recovery of 70-134% is projected
- Historical KOSPI analysis of major events shows 75-87.5% positive returns with mean 3-month return of 36.9%
Topics Covered
DRAM
Memory Semiconductors
AI Demand
SK Hynix
Korean Equities
Semiconductor Cyclicality
200-Day Moving Average
Companies Mentioned
SK Hynix
Samsung Electronics
Micron Technology
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