Memory Stocks Outlook: Susquehanna's Hosseini Highlights AI-Driven Price Momentum on CNBC

The CNBC appearance by Susquehanna’s Mehdi Hosseini provides significant validation for the constructive outlook on memory stocks that has been building throughout late 2025 and early 2026. His characterization of “increasing estimates for memory stocks driven by stronger prices” aligns with observable market data and analyst consensus shifts that have materially upgraded price targets across the memory sector [1][5].

The pricing dynamics in the memory market have demonstrated remarkable strength that exceeds typical cyclical patterns. DRAM contract prices have increased approximately 55-60% quarter-over-quarter, while DDR5 64GB RDIMM pricing has surged from $149 in September 2025 to approximately $239—a level that could potentially double relative to early 2025 lows [6][7][8]. This pricing strength is not isolated to DRAM; NAND Flash continues to experience tight supply conditions, with enterprise applications projected to become the largest NAND Flash segment in 2026 [6]. The High Bandwidth Memory market, critical for AI accelerator applications, remains sold out through 2026 across major suppliers including SK Hynix, Samsung, and Micron [8].

The AI trade serves as the primary demand catalyst underlying this structural shift. North American Cloud Service Providers are accelerating AI infrastructure investments through 2026, creating sustained demand for server memory and HBM products that is outpacing supply growth. This demand-supply imbalance has enabled memory manufacturers to maintain pricing power while improving margins, fundamentally altering the sector’s earnings trajectory.

The memory sector’s supply discipline represents a deliberate strategic shift by manufacturers prioritizing profitability over volume expansion. DRAM and NAND supply growth is projected at only 16-17% year-over-year in 2026—significantly below historical norms [9]. Technical challenges associated with advanced node transitions further limit effective capacity growth, extending the period of favorable pricing dynamics. Micron’s upcoming New York Megafab groundbreaking on January 16, 2026, represents the largest private investment in New York state history, but meaningful capacity contribution remains years away [3][4].

Multiple Wall Street firms have raised Micron price targets to historically high levels, with UBS and Piper Sandler both establishing $400 targets [3]. The consensus rating for Micron stands at Buy with 80.6% of analysts recommending purchase, though the consensus target of $315.00 remains 6.7% below current levels, reflecting some holdouts who view current valuations as demanding [0][3]. This divergence between price action and consensus targets warrants attention from market participants.

The January 7th trading pattern—where memory stocks experienced modest pullbacks while the broader Technology sector gained 0.85%—suggests rotation within tech names rather than rejection of the memory thesis [0]. Western Digital’s more significant decline of 7.56% indicates differentiated stock selection considerations within the memory sector, potentially reflecting company-specific factors or market positioning dynamics.

The structural improvement in memory pricing, transitioning from cyclical to structurally higher levels, creates a favorable fundamental backdrop for sector participants. AI demand provides a durable demand extension through 2027, while continued supply constraints support pricing power. Entry opportunities during pullbacks may emerge as the sector historically experiences volatility around earnings events and macroeconomics developments. Micron’s scheduled Q2 FY2026 earnings report on March 19, 2026, with EPS estimates around $8.39, will provide a key catalyst for reassessment [0].

Several elements warrant careful observation. Current valuations present considerations, with Micron trading at 31.93x P/E and at price levels exceeding some analyst targets, meaning the market has already incorporated significant optimism [0]. Execution risks surround Micron’s New York Megafab timeline and potential cost overruns. The supply response anticipated in 2027 could shift market dynamics if capacity additions accelerate beyond demand growth. Additionally, AI demand sustainability depends on hyperscaler capital expenditure levels; any moderation in AI infrastructure spending could weaken the demand thesis. Geopolitical factors including China export restrictions and Taiwan tensions introduce ongoing uncertainty [10].

Some analytical gaps warrant acknowledgment. The full transcript of Hosseini’s January 7th CNBC remarks was not available, limiting granular insight into his specific numerical targets and timeline expectations. The precise timing for supply-demand balance improvement in 2027 lacks granular detail, and the consumer market impact of continued memory price increases on PC and smartphone demand remains incompletely quantified.

Market performance data confirms the memory sector’s exceptional trajectory. Micron has delivered returns of +7.09% year-to-date, +42.40% over one month, +81.91% over three months, +181.68% over six months, and +231.46% over one year [0]. This performance reflects the fundamental improvement in memory pricing dynamics and sustained AI-driven demand that Hosseini highlighted on CNBC.

The pricing environment continues to strengthen across memory categories. DRAM prices have increased 50-60% year-over-year with expectations of an additional 30% increase in 2026. HBM3/3E products remain in persistent shortage with suppliers maintaining sold-out positions through 2026 [6][7][8]. The industry’s focus on server applications and AI workloads is reshaping product mix and profitability profiles.

Sector correlations indicate memory weakness on January 7th represented technical correction following strong gains rather than fundamental rejection. The Technology sector’s outperformance (+0.85%) alongside memory stock weakness suggests internal rotation within technology names, with semiconductor equipment stocks like Lam Research and Applied Materials showing similar modest weakness near 52-week highs [0].

Forward-looking factors for monitoring include DRAM/NAND pricing trends, hyperscaler CapEx announcements, supplier capacity ramp schedules, and the New York Megafab construction timeline. The memory sector’s current premium valuations are predicated on sustained AI demand and continued pricing power; signs of demand softening or supply oversupply could lead to significant multiple compression, making timing and position sizing important considerations [10].