Hedge Fund Warns Memory Stocks Have Yet to Bottom

Generative AI has expanded rapidly since ChatGPT launched in December 2022, fueling demand for high-bandwidth memory and expectations of supply shortages. That has positioned companies including Samsung Electronics and SK hynix as major beneficiaries of AI infrastructure spending. But memory chips trade much like commodities, leaving prices and profits vulnerable to sharp reversals when supply and demand fall out of balance and raising questions about whether the stock rally can last.

As of May 25, 2026, Samsung Electronics and SK hynix had risen 114% and 186%, respectively, since the start of the year, while Micron had gained 141%. BlueBox Asset Management warned of a boom-bust cycle, while Standard Chartered advised taking some profits. New plants are expected to begin mass production from late 2027 to 2028. Nomura, meanwhile, set 12-month price targets of 4 million won for SK hynix and 590,000 won for Samsung.

The boom in generative AI and data-center construction is driving demand for high-bandwidth memory, or HBM. Samsung Electronics, SK hynix and Micron are shifting resources toward higher-margin products, squeezing supplies of conventional DRAM and NAND. HBM is a critical component in AI accelerators, and shortages could affect server delivery times, electronics costs and the semiconductor industry cycle.

Micron recently reported better-than-expected results, while the market estimates SK hynix’s revenue could reach $54.8 billion. Samsung and SK hynix have said their main memory capacity is fully booked through 2027. The industry estimates that even with manufacturers accelerating HBM capacity expansion, the supply shortfall will still be about 40% at the end of 2027. New capacity may not begin gradually easing the pressure until after 2027 at the earliest.