Morgan Stanley Elevates Nvidia Over SanDisk After Memory Stocks Rally 300%-900%
Morgan Stanley shifted its top chip pick from memory firms such as SanDisk to Nvidia, noting memory stocks surged 300%-900% while Nvidia’s shares remained flat despite a 38% rise in earnings expectations over six months. The bank highlighted Nvidia’s 18-times expected 2027 earnings valuation and AI capacity commitments through 2028.
1. Morgan Stanley Shifts Top Chip Pick
Morgan Stanley has replaced memory firms such as SanDisk with Nvidia as its leading semiconductor recommendation, citing Nvidia’s improving business fundamentals and a flat share price despite rising earnings estimates. This marks a reversal from its prior stance when memory stocks were expected to deliver stronger AI-related leverage.
2. Memory Stocks Rally
Memory-focused stocks, including SanDisk, climbed between 300% and 900% since Morgan Stanley’s previous call, driven by robust AI infrastructure demand and favorable memory pricing trends. During the same period, Nvidia saw its earnings expectations rise by 38% while its stock remained largely unchanged.
3. Potential Impact on SanDisk
The downgrade in emphasis on SanDisk could pressure its stock sentiment, as investor focus shifts toward Nvidia’s leadership in AI processors and attractive valuation at around 18 times expected 2027 earnings. Sustainable AI capacity commitments through 2028 may reinforce this trend, potentially limiting memory stocks’ near-term upside.