Morgan Stanley lifts its SIMO target
Odaily reported that Morgan Stanley has adopted a more constructive stance on SIMO, raising its target price to $400. The revision is tied to a broader reassessment of memory and storage demand rather than short-term sentiment alone. In the bank’s view, the expansion of AI server infrastructure is changing how investors should think about the NAND market and the companies linked to it.
AI servers are changing the NAND cycle
The central argument is that AI servers are becoming a powerful and durable source of NAND demand. Historically, NAND cycles were heavily influenced by consumer electronics, especially smartphones and PCs. Morgan Stanley now argues that AI training and inference workloads introduce a different demand profile, one that is tied to large-scale infrastructure spending and higher-performance storage requirements. That shift could make the sector less dependent on traditional end-market swings.
NAND shortage may last through 2027
The report’s most notable forecast is that the NAND shortage could continue into 2027, while supply risks may still remain unresolved in 2028. In practical terms, this suggests that even if capacity expands, the market may not return quickly to a loose supply environment. For investors, the message is significant: improving earnings expectations may extend across the storage value chain, and the AI capex cycle is increasingly benefiting not only compute-focused semiconductor names but also adjacent memory and controller businesses.
