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Investing.com -- Mizuho's TMT specialist Jordan Klein believes it is time to buy memory stocks, pointing to improving supply-demand dynamics and a potential pricing recovery in the second half of 2025.
“I would be buying MU and WDC and looking to get more positive on memory stocks,” Klein wrote, adding that Lam Research (NASDAQ:LRCX) could also benefit as a semiconductor capital equipment play.
The call comes as TrendForce forecasts a turnaround for NAND and DRAM, with NAND pricing expected to decline only 0-5% in Q2 before rising 10-15% in Q3 and 8-13% in Q4.
“These are just price forecasts, so only time will tell,” Klein cautioned, but emphasized that memory stocks tend to rally before actual spot prices recover.
Investor sentiment in DRAM and NAND remains cautious, but Klein noted that “just a little bit of good news could help drive these stocks a lot higher.”
He highlighted that Micron (NASDAQ:MU) has gained 10% since last week, despite management lowering gross margin guidance at the Wolfe Conference.
“[It is] very bullish price action to me and likely will pressure all the shorts who have a decision to make near term,” he said.
Beyond Micron, Klein is particularly bullish on Western Digital (NASDAQ:WDC) and Sandisk, citing WDC’s upcoming spin-off of its NAND flash business and its joint venture with Japan’s Kioxia. Kioxia shares jumped 25% in three days following earnings that signaled a NAND market recovery in the second half of the year.
With AI server storage demand rising, China stimulus boosting consumer sales, and inventory levels depleting, Klein sees MU testing $130+ later this year and believes memory stocks are primed for upside.
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