JPMorgan Calls Memory-Stock Pullback a Buying Opportunity, Overweights Samsung Electronics and SK Hynix

JPMorgan has described the recent selloff in memory-chip stocks as a medium-term buying opportunity.

BlockBeats reported on Oct. 15 that JPMorgan's Asia-Pacific equity research team characterized the global market for memory-related shares as being in a phase of resetting expectations. The team said a perception gap has opened between market concerns about the sustainability of artificial-intelligence investment and actual supply-and-demand conditions in the memory-chip market.

The bank said investor sentiment has become overly depressed, creating favorable return conditions for investing in the upcycle in memory fundamentals. In that context, the recent correction in memory-related shares amounts to a medium-term buying opportunity.

JPMorgan named Samsung Electronics, SK Hynix, Kioxia, Samsung Electro-Mechanics and ISC as its key overweight picks for the next six months. The list spans not only memory makers but also parts suppliers and other companies in the supply chain.

The bank added that it would reassess that view if weakness in memory supply and demand persists or if operating-profit forecasts for related companies are broadly revised lower.