Bernstein Bullish on Memory Stocks Following Over $700 Billion in AI Chip Deals

Bernstein has reaffirmed its bullish stance on the memory chip sector following a series of massive partnership announcements involving industry leaders Nvidia, Broadcom, Samsung, and SK Hynix. The deals, unveiled at a South Korean government-hosted AI Summit in San Francisco, underscore the critical need for memory supply to fuel the growth of artificial intelligence infrastructure.

Blockbuster AI Partnerships

The summit produced several significant agreements aimed at securing long-term technology development and supply chains. According to a note from Bernstein, these deals represent a substantial commitment to the memory sector.

• SK Hynix and Nvidia: Signed letters of intent for a partnership valued at more than $500 billion. The deal covers the stable supply of next-generation AI memory and collaboration on a 2GW Vera Rubin DSX AI Factory for SK Telecom, planned for 2027.
• Samsung and Broadcom: Inked a memorandum of understanding worth $200 billion through 2030. This agreement includes high-bandwidth memory (HBM) and advanced foundry services, focusing on 2-nanometer and smaller process technology.
• SK Group: Is also reportedly pursuing an additional $250 billion in memory supply collaborations with other global tech firms over the next five years.

Analyst Take: Securing a Critical Resource

Bernstein analysts, led by Mark Li, interpret these announcements as a clear signal of memory's growing importance in the AI ecosystem. “We believe the announced amounts are more for memory and indicate the need for NVIDIA & Broadcom to secure memory supply,” they wrote.

Ad

To put the figures in perspective, the analysts noted that consensus expectations for annual memory revenue are approximately $1.3 trillion in both 2027 and 2028. The scale of these partnerships highlights a strategic move by AI leaders to lock in essential components for their future growth, which could also help ease their own supply concerns.

Market Outlook

Bernstein remains constructive on memory stocks, arguing that the sector's recent pullback represents "a good entry point" for investors. The firm's analysts believe memory is more crucial to AI development than logic semiconductors. They also see a limited competitive threat from China in the high-end DRAM market due to a lack of access to essential EUV lithography technology.

The analysts stated that any potential impact on foundry leader TSMC from the Samsung-Broadcom deal "should be negligible," as it remains uncertain if Broadcom will shift production of its AI ASICs to Samsung. Bernstein maintains Outperform ratings on Samsung, SK Hynix, and Micron.