Memory-chip shares are trading at sharply reduced earnings multiples after a steep retreat, while UBS, JPMorgan and Bank of America remain positive on industry demand. Their assessments contrast with U.S. stock-market sentiment, which reached Extreme Fear on October 16, its most fearful reading in more than six months.
The valuation figures cited for fiscal 2027 put Samsung at 2.99 times earnings, SK hynix at 2.72 times and Micron at 4.96 times. Samsung and SK hynix therefore both trade below three times next year’s projected profits.
Bank of America’s broader assessment describes a roughly three-and-a-half-month correction, with Samsung and SK hynix each losing more than half their value since their June highs. The bank believes memory-sector valuation multiples have reached a bottom, despite no corresponding downturn in the underlying business.
Using consensus earnings estimates for 2027–28, Bank of America places Samsung and SK hynix at two to three times earnings. That represents discounts of 30% to more than 50% against the four-to-seven-times multiples observed during earlier expansions preceding the 2001 internet bubble collapse, the 2008 financial crisis, the 2018 cloud boom and the 2022 online-commerce expansion.
Price-to-book ratios have also approached one times projected 2027–28 book value. Bank of America associates such valuations with industry troughs marked by excess inventories, DRAM selling-price reductions exceeding 50%, substantial operating losses and expensive borrowing, including conditions seen in 2019 and 2023.
Bank of America projects exceptionally strong selling prices, revenue and margins from the fourth quarter of 2026 through 2028. Its forecast nevertheless allows for limited sequential growth during 2027 and a single-digit annual earnings-per-share decline in 2028.
Even with that decline, it expects 2028 revenue, operating profit and EPS to remain near records and close to 2027 levels. Replacement purchases of data-center AI memory—including LPDDR5, SOCAMM, HBM and eSSD—alongside more advanced GPUs and ASICs should also support demand, according to the bank.
Bank of America views the share-price retreat as largely inconsistent with industry fundamentals, attributing it to excessive concern about an AI-memory boom followed by a bust.
Meanwhile, UBS regards the 19% memory-stock selloff as a buying opportunity rather than evidence that the industry cycle is failing. It expects AI agents to strengthen orders for server DDR5 through 2027.
The bank forecasts HBM4’s share of total high-bandwidth-memory demand at 39% in 2027, compared with 17% in 2026. On supply, UBS anticipates Samsung adding monthly DRAM capacity of 120,000 wafers by late 2027, but expects little meaningful effect on availability before late 2028.
JPMorgan’s case for higher memory-stock valuations rests on changes to producers’ business models and unusually clear visibility into future business. It points to a widening supply-demand mismatch, growing AI and hyperscaler capital spending, and increasing HBM requirements for each AI accelerator.
Production requirements are another constraint. HBM4E consumes four times as many wafers per bit as DRAM, intensifying the capacity trade-off between the products. JPMorgan also identifies the SCA/LTA framework as a significant contributor to improved visibility for manufacturers.
