MW Micron's stock falls further, but this analyst says bears are missing the point

By Britney Nguyen

Investors are getting spooked about the historically cyclical memory market, but a Morgan Stanley analyst says trends are 'anything but normal' this time around

Micron's stock was down on Thursday morning.

Shares of Micron Technology and Sandisk are extending their declines on Thursday, with investors worried that the memory cycle could soon reach a peak.

The memory market is traditionally cyclical, which is why some on Wall Street are skittish even in the face of sky-high prices for dynamic random-access memory and NAND. But looking to past memory cycles as an analogue to the current boom "misses the point," Morgan Stanley analyst Joseph Moore said in a Thursday note.

With artificial intelligence eating up most of the supply for DRAM, "there isn't enough left over for other sectors, and everywhere we look we see indications that it is a true bottleneck," Moore said, pointing to disruptions in personal-computer and smartphone manufacturing.

There are various elements of the current memory cycle that might have been concerning in past ones, Moore noted, pointing to flattening spot prices and big increases in capital spending from memory makers. Micron $(MU)$ recently raised its fiscal 2026 capital-expenditures guidance to $25 billion from $20 billion, and it expects that number to "step up meaningfully" in the next fiscal year.

That's sparking fears that supply will grow and erode the pricing power that Micron and its fellow memory suppliers have enjoyed.

But those concerns assume this memory cycle follows historical patterns. Moore argued that things are "anything but normal" this time around, as demand looks "durable" for an extended period. Customers paying a massive premium for components probably aren't doing so to "stockpile memory in a warehouse," he suggested.

Micron's stock is down 3.5% in Thursday morning trading and tracking toward its sixth straight daily decline, while Sandisk's $(SNDK)$ is off 4.5% and on pace to log its fifth consecutive daily drop.

See more: Micron's stock is dropping. Is Google partly to blame?

Moore also weighed in on Google's announcement of a new compression algorithm late Tuesday, which it said improves data storage in AI models without affecting performance. That development weighed on Micron's stock on Wednesday, with investors worried that AI players would need less memory supply going forward.

But Moore said that Google's improvement to key-value cache efficiency, the technique that allows an AI model to "remember" data it has processed in order to respond to inquiries faster, won't have much of a direct impact on overall memory demand, because it is held in high-bandwidth memory and the capacity of that component cannot change.

And while OpenAI's shuttering of its memory-intensive AI-video generator, Sora, may have been viewed as another negative for the memory trade, Moore thinks OpenAI is simply looking to put its compute resources elsewhere.

-Britney Nguyen

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March 26, 2026 09:56 ET (13:56 GMT)

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