Morgan Stanley’s ‘Memory Winter’ Bear Says Samsung, SK Hynix Selloff Is a Buying Chance

Morgan Stanley previously warned of a “memory winter”

“A small bump in the industry cycle”

“Shareholder returns such as buybacks are a catalyst”

Morgan Stanley says the sharp correction in memory-chip stocks appears to be over after the recent selloff, making current valuations an attractive tactical re-entry point.

According to the investment banking industry on August 9, Morgan Stanley wrote in its August 6 Asia technology report, “Memory — A Small Bump,” that “the steepest correction seen so far in the memory industry appears to be over” and that “valuations offer an attractive tactical re-entry opportunity.”

The bank described the latest pullback as a natural small bump as the memory cycle matures. It also sees shareholder returns, including share buybacks, as a key catalyst for further gains in the shares.

Morgan Stanley said the pace of memory-price increases may slow from the fourth quarter of this year as inventories and supply rise. That could limit room for further upward revisions to earnings forecasts.

The bank remains positive on artificial-intelligence capital spending and shareholder returns. It kept its price targets on SK Hynix and Samsung Electronics at 2.6 million won and 375,000 won, respectively. Morgan Stanley raised its fiscal 2026 earnings-per-share estimate for SK Hynix by 13% from its previous forecast, but cut Samsung Electronics by 10%.

Sean Kim, the Morgan Stanley analyst who wrote the report, had warned of a slowdown in the memory cycle in 2021 in a report titled “Memory, Winter Is Coming.” Early last month, Morgan Stanley also warned that the acceleration in DRAM price gains was nearing a peak and that investor positioning in memory stocks had become overly crowded, with leverage elevated, raising the risk of a short-term correction.

Park Su-bin, Hankyung.com reporter waterbean@hankyung.com