Bank of America Sees Cycle Floor in U.S. Memory-Stock Multiples

Bank of America sees the recent decline in U.S.-listed memory-chip stocks as out of step with company fundamentals, arguing that their valuation multiples have reached a cycle floor despite fears the AI memory boom will reverse.

The bank expects memory-chip average selling prices, revenue and margins to remain at supercycle levels in 2027 and 2028. Earnings growth may slow over that period, but the bank expects absolute earnings to stay near historical highs.

That distinction matters to the bank’s assessment: slower growth would not, by itself, mean chipmakers’ earnings had fallen sharply. Bank of America views market concern about a downturn in AI-related memory demand as excessive.

The view differs from an earlier warning about South Korean memory stocks. Morgan Stanley cautioned on Oct. 13 that low earnings multiples for Samsung and SK Hynix could coincide with a cycle peak. Its warning concerned those two companies, while Bank of America’s assessment addresses U.S.-listed memory-chip stocks.