UBS Says Memory Prices Could Still Gain 40%. Does That Make Western Digital Stock a Buy Here?

Investors are piling into momentum trades, such as memory chip stocks like Western Digital Corporation (WDC), on news of the U.S.-Iran ceasefire deal. Memory chips have recently seen a significant increase in demand due to the need for memory and hard drives for artificial intelligence (AI) infrastructure.

Against this backdrop, UBS analysts expect DDR prices to go up 37% in the second quarter and NAND prices to rise 40%. However, peak memory contract pricing may be avoided through long-term agreements.