• Memory chip stocks rose in premarket trading after a recent pullback, with analysts at UBS, Citi, and Bank of America upgrading forecasts on AI demand.
  • UBS projects the DRAM market will remain undersupplied until at least 2028, reinforcing a supercycle narrative.
  • Citi and Bank of America raised price targets on memory names, citing strong AI data-center demand and tight supply.

Memory chip equities bounced back in premarket trading Friday, as analysts described the recent downturn as a healthy reset and a buying opportunity. The rebound comes after weeks of selling pressure that had erased some of the sector's gains from earlier this year.

“The pullback was noise, not a signal,” said an analyst at UBS, who expects the DRAM market to remain undersupplied until at least 2028. UBS reiterated its bullish stance on major memory makers, pointing to rising high-bandwidth memory demand from AI training and inference workloads. Citi and Bank of America also weighed in, raising their earnings estimates and price targets on stocks including Micron Technology Inc. and SK Hynix Inc., citing stronger-than-expected AI-driven orders.

The rally aligned with a broader tech rebound, as investors rotated back into semiconductor names following a sharp selloff earlier in the month. Memory stocks had slid on concerns that AI spending was peaking, but the latest analyst calls suggest the opposite: demand is still accelerating.

“The weakness we saw was a healthy reset — valuations came down, and now the fundamentals are even better,” said a Bank of America semiconductor analyst in a note to clients. The bank raised its price target on Micron by 15%, citing tighter supply and higher pricing in the second half of the year.

According to people familiar with the matter, memory suppliers are already allocating production capacity to high-bandwidth memory, which commands premium prices, while legacy DRAM and NAND remain constrained. Bernstein and Goldman Sachs have also flagged rising pricing expectations for the second quarter.

[Correction: An earlier version of this article misstated the BofA analyst's quote. The correct phrasing is "valuations came down, and now the fundamentals are even better."]