The gains came after weeks of volatility in chip stocks, as investors grappled with concerns over a potential slowdown in memory earnings growth as quarterly price increases moderate in the second half of 2026.
They have also questioned whether signs of slowing capital spending by major U.S. cloud service providers, rising financing needs and recent multi-billion-dollar capacity expansion plans by memory makers could eventually ease the industry’s supply-demand imbalance that has fuelled the chip stock rally.
However, some analysts remain optimistic that structural demand from AI applications will keep the market tight.
Kim Sunwoo, a senior analyst at Meritz Securities, said suppliers of DRAM chips, used for memory in computers, servers and mobile devices, were currently meeting only about 75% to 80% of demand as shortages intensified in the second half of 2026.
That fulfilment rate could fall to the 60% range in 2027, Kim said, adding that suppliers would still be able to meet only around 70% of demand even after excluding more speculative orders.
"With supply shortages set to deepen, memory prices and earnings are likely to continue improving, supporting a strong rebound in the share price," Kim said.
Echoing that view, HSBC said in a recent note that improving profitability of AI services should continue to underpin strong cloud spending.
The brokerage also said the industry's shift toward three- to five-year long-term supply agreements should improve earnings visibility over the next two to three years and reduce earnings volatility.
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