Stock Markets April 25, 2026 04:38 PM

Analyst: Memory Stocks Poised to Ride AI-Driven CPU Demand

Mizuho strategist highlights DRAM and NAND names as beneficiaries of rising CPU attach rates for AI workloads

By Derek Hwang MU SNDK AMD
Analyst: Memory Stocks Poised to Ride AI-Driven CPU Demand
MU SNDK AMD

A Mizuho TMT analyst says accelerating investment in AI - particularly agentic AI workloads - is strengthening demand for DRAM and specialized memory such as HBM, arguing that tight supply and rising CPU attach rates make several memory stocks attractive on valuation grounds. The analyst highlights specific names in DRAM and NAND that he sees as undervalued relative to CPU and platform peers.

Key Points

  • Accelerating AI investment is expected to increase demand for DRAM and specialized memory such as HBM, as CPUs and memory are deployed together for data-heavy workloads - impacting semiconductors and server hardware sectors.
  • Supply for memory is tightening with no significant new capacity expected until the second half of 2027, a condition likely to support rising memory prices - affecting memory chipmakers and downstream OEMs.
  • Several memory-focused companies are viewed as cheaper on valuation compared with some CPU and platform peers, creating potential buying opportunities in the memory and storage segments of the market.

Investment flows into artificial intelligence workloads are changing how market participants view the semiconductors that support data-intensive compute, according to a Mizuho technology, media and telecom analyst. The analyst argues that memory - and DRAM in particular - is set to benefit materially from the shift, creating buying opportunities among several memory-focused companies.

"I could not be more bullish on DRAM and Memory overall off this Ai CPU acceleration narrative/chase," the analyst said, reflecting a view that rising AI-related CPU deployments will drive sustained memory consumption.

Industry indicators cited by the analyst point to tightening supply conditions for memory products. Supply is running short relative to demand, and the analyst expects no material new supply until the second half of 2027. That imbalance is a key reason he anticipates upward pressure on prices for DRAM and related memory types.

High bandwidth memory - HBM - which is a specialized DRAM used in AI accelerators, is singled out for its role in the AI stack. The analyst notes a 3-1 trade ratio for HBM, underscoring the multiplier effect between processors and the memory that supports them.

"You cannot operate a cpu without ram memory. Do not forget that fact. They go hand in hand. So a lot more server (or even client CPUs) means a lot more DRAM over time," the analyst added.

On valuations in the NAND and broader memory space, the analyst contrasts a group of memory names with several CPU and platform companies. He describes Micron Technology (MU), Samsung (005930), SK Hynix (000660) and SanDisk Corp (SNDK) as noticeably cheaper when compared with Advanced Micro Devices (AMD), Arm Holdings (ARM) and Intel Corp (INTC).

Micron is characterized as particularly inexpensive, trading at roughly 3-4 times buyside earnings per share, a valuation the analyst labels "crazy cheap." SanDisk is noted as "still feels good" heading into its earnings report, with rising solid-state drive demand creating the possibility that management could guide to $25-30 per quarter in EPS with gross margins above 80 percent, the analyst said. He also suggested SanDisk could remain an acquisition target even after a strong year-to-date rally, though he qualified that by saying many hedge funds and active managers may not be overweight or long the stock because of its trading volume risk.

Investor focus on CPU and GPU dynamics was reinforced by commentary from Intel's conference call, according to the analyst. Intel management emphasized that agentic AI applications - systems that autonomously plan and execute tasks - require a much higher CPU attach rate to GPU than other AI workloads. The analyst said attach ratios could move from roughly 1:8 to between 1:2 and even 1:1 for these workloads, increasing the role of CPUs to manage and orchestrate tasks where security and planning are important.

Within this competitive backdrop, the analyst sees AMD as well positioned because of its mix of CPU, FPGA and GPU offerings and because it is less capacity constrained than Intel, owing in part to its use of TSM. He also projects that Nvidia (NVDA) will sell a meaningful number of ARM-based CPUs for certain new AI workloads.


Taken together, the analyst's view ties a macro demand trend - expanded CPU use in select AI applications - to company-level opportunities among memory suppliers, with specific valuation and supply considerations driving his recommendations.

Risks

  • Memory supply and demand dynamics could evolve differently than expected; while the analyst cites no new supply until 2H27, changes in capacity additions or demand growth would affect prices - impacting memory makers and customers.
  • SanDisk's potential upside is tied in part to management guidance for SSD-driven EPS and gross margins; such guidance is not certain and outcomes around earnings could differ - affecting storage names and investor expectations.
  • Trading volume risk in certain stocks, such as SanDisk, could limit the ability of some investors and funds to take large positions despite attractive fundamentals - relevant to equity market participants and liquidity providers.

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