OMG, UBS expects Memory to eat 64% of Hyperscaler Capex next year
Memory spend goes from $369B in 2026 to $933B in 2027, while Capex goes from $1T to $1.45T
Memory is more than 100% of the Capex raise
That means everything that ISN'T memory shrinks next year, from $630B to $520B (wow)
Three things I take from this:
1. This is a PRICE story, not a volume story. Hyperscalers aren't buying 13x more memory than they did in 2025, they're paying way more per bit. UBS has DDR prices up 341% this year alone
2. I'm seeing people on X point at $1.45T of capex and scream bubble. But more than all of the increase is landing with a handful of memory makers (Samsung, SK Hynix, Micron, plus the NAND players). That's not a bubble, that's the most extreme pricing power anywhere in the AI supply chain
3. It doesn't reverse soon either. UBS has 2027 DRAM demand growing 36% vs supply growing 19%, and Citi has DRAM prices rising EVERY year through 2031 (see my post below)
The market seems to have stopped caring as much about Memory, as its consolidated for the last 3 months but I think Micron and the others are still a screaming buy here as the market wakes back up to these numbers
I'm long $MU and if you want to see what else I hold in my portfolio you can check it out here: link.milkroad.com/t5837z
Don't forget to give me a follow @kylereidhead for more insights on AI and markets
WOW! Memory stocks are going MUCH HIGHER
Citi just forecasted DRAM prices rising EVERY year through 2031
That has never happened in the history of the memory industry. If Citi is right, the way the market prices memory stocks is flat out wrong
Not only is this not cyclical, it's a structural change in prices that pushes Memory higher for at least 8 years straight
Why is this happening? HBM, the memory inside every AI GPU, consumes roughly 3x the wafer capacity of standard DRAM per bit. As Micron, SK Hynix and Samsung convert their fabs to HBM, regular DRAM supply gets starved right as AI demand for it explodes too. Citi sees that supply tightness persisting until 2031
Bears will scream "cycle peak" at that deceleration in 2027. But look at what the numbers actually say: prices NEVER go negative. Not one down year through 2031
For 25 years memory was a commodity coin flip, massive up years always followed by brutal crashes (2019: -51%. 2023: -43%). Citi is forecasting the first 8-year stretch in industry history with zero down years. That's not a cycle anymore, that's a repricing
And it flows almost straight to the bottom line for producers. Micron just posted the largest earnings beat in its history with 85% gross margins, and that was BEFORE the 242% year fully hits the income statement.
Even more important to note that teh buybacks from this free cash flow haven't even started yet (coming in December)
The market still values memory stocks like the crash is 18 months away, according to Citi's chart that's not happening
I hold Micron in my Milk Road Portfolio, our analysts got our members in $MU below $400. We also hold a few other memory stocks alongside other ways to play the Ai infra build out. You can check out our real-time portfolios here: link.milkroad.com/t5837z
Don't forget to give me a follow @kylereidhead for more insights on AI and markets
Sep 24, 2026 · 4:30 PM UTC
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