Are Memory Stocks Old News? Why Morgan Stanley Just Snubbed Micron.

Financial services major Morgan Stanley has been convinced to remove memory leader Micron (MU) as its top pick and replace it with Nvidia (NVDA). Raising doubts over the sustainability of the current strong demand, John Moore, an analyst at the firm, said, “There is a commonly voiced view that memory stocks are pricing in a much longer and more durable cycle than processor stocks; we actually somewhat disagree with that. Our memory conversations with clients are very similar to NVIDIA conversations - a clear recognition that conditions are exceptional in both right now, But [sic] a very strong peak year at current valuations has been viewed as more investable for memory, because upward revisions are more dynamic. There is not much conviction about 2027 for either stock.”

It should be noted that though Nvidia has been preferred as the top pick, it has not been with much enthusiasm. As for the demand for memory, it remains as hot as ever. Though it may go through its own cycles, the overall picture remains unchanged: AI will grow rapidly, data center demand will grow rapidly, and consequently, the demand for memory will also grow rapidly.