Nomura: Memory Chip Shortage to Persist Until 2028, AI Capex Remains Resilient

Cailian Press Financial News Agency

Open the APP

Is the market overly panicked? Nomura: Memory shortage will last until 2028, and AI capital expenditure remains resilient

Cailian Press Liu Rui Editor Wei Shaolei 2026-10-25 15:03

① Global new data center capacity is expected to grow about 41% next year, rising from 22.3 GW this year to 31.5 GW next year; ② The combined net cash flow of nine semiconductor companies will grow from $282 billion in the second quarter of this year to about $2 trillion by the end of 2028.

Cailian Press, October 25 (Editor Liu Rui) — Recently, as market concerns about the AI outlook intensified, global AI technology stocks experienced considerable turbulence, especially shares of South Korean memory giants Samsung Electronics and SK Hynix, which at one point saw sharp fluctuations.

In response, international investment bank Nomura Securities said that the market's concerns about the outlook for artificial intelligence investment are an "overreaction," the memory chip shortage will continue until 2028, and valuations in the memory sector have been severely undervalued.

Market concerns about the memory sector are excessive

In recent times, global memory stocks have experienced a "bloodbath": as global investors' concerns about whether the AI investment boom can continue intensified, share prices of major memory giants have fallen from previous highs, and the Philadelphia Semiconductor Index even at one point recorded its longest losing streak since the 2008 global financial crisis.

However, Nomura judges that memory sector stocks have already fallen about 37% from their highs, pushing the average expected price-to-earnings ratio for memory stocks in 2027 down to around 3x, meaning valuations have been severely undervalued.

The factors weighing on the market are multifaceted: slowing growth among AI companies, funding strain at data center operators, and combined industry competitive pressure have together dragged down investor sentiment. Among these, bond prices of AI cloud service provider CoreWeave recently fell sharply, intensifying market concerns about a contraction in capital expenditure (CAPEX) by AI companies.

However, Nomura believes the market has actually overreacted to the impact of the above risks on the medium- and long-term supply-demand landscape for memory chips.

Nomura also emphasized in its report that it maintains "Buy" ratings on South Korea's Samsung Electronics and SK Hynix, with target prices of KRW 670,000 and KRW 4.7 million respectively, implying about twofold upside from the two companies' recent share prices, and listed the two companies as "key focus stocks."

Memory demand is still expected to outpace supply

Nomura's core supporting argument comes from the data center expansion trend—according to Nomura's tracking statistics, global new data center capacity is expected to grow about 41% next year, rising from 22.3 GW this year to 31.5 GW next year. Against the backdrop of such large-scale continued capital expenditure, memory chip demand growth is still expected to exceed supply, supporting prices at strong levels.

Nomura believes that global AI companies as a whole are still maintaining rapid growth. The bank estimates that OpenAI and Anthropic together saw revenue surge about 507% year on year in the third quarter, but Nomura also cautioned that a strong rebound will be needed in the fourth quarter to meet the full-year revenue expectations set by the market.

"Risks at individual companies may rise, but data centers and equipment already built can be taken over and used by other operators," Nomura wrote in the report. Its logic is that a financial crisis at a single operator does not mean that overall investment at the infrastructure level will disappear.

Other institutions' research corroborates Nomura's judgment

In fact, the forecast direction of other market research institutions also aligns with Nomura's judgment. Earlier this month, TrendForce released a report saying that the combined capital expenditure of nine leading global cloud service providers (CSPs) will reach $957 billion this year, up 106% year on year, and will continue to grow 60% next year, exceeding $1.5 trillion. Forecasts for 2026 and 2027 were both revised upward from previous levels.

The research covers Google, Amazon, Meta, Microsoft, Oracle, as well as China's ByteDance, Tencent, Alibaba, and Baidu.

TrendForce said that higher prices for complete servers, price increases driven by component shortages, and companies paying advance payments to secure supply will together push up capital expenditure.

The institution also specifically noted that some component suppliers require prepayment, causing cloud service providers' cash spending pace to move forward. AI server shipments are expected to grow 32.2% this year and nearly 36% next year.

Nomura also expects that memory manufacturers' financial conditions will improve significantly in the future. Its estimates show that the combined net cash flow of nine semiconductor companies, including Samsung Electronics and SK Hynix, will grow from $282 billion in the second quarter of this year to about $2 trillion by the end of 2028. The analysis points out that the benefits brought by AI infrastructure expansion are more reflected in the improvement of chip manufacturers' cash flow than in that of data center operators.

Global Market Intelligence

Foreign institution views - United States

Related sectors: Artificial Intelligence +3.27% Memory +3.04% Data Centers +2.13% AI Servers +2.57% Semiconductors +3.78% Electronics +2.77%

Cailian Press statement: The content of this article is for reference only and does not constitute investment advice. Investors who act on it do so at their own risk.

Business cooperation

Popular unlocks

[Telegram interpretation] The Ministry of Industry and Information Technology requires accelerating the "AI + software" special action and supporting the development of agent software. Analysts are optimistic that under policy promotion, AI applications will move from "local exploration" to "systematic implementation." This company has released multiple agent products, and multiple customers have already implemented them commercially.

The Ministry of Industry and Information Technology requires accelerating the "AI + software" special action and supporting the development of agent software. Analysts are optimistic that under policy promotion, AI applications will move from "local exploration" to "systematic implementation." This company has released multiple agent products, and multiple customers have already implemented them commercially. Another company has integrated its full-stack AI large-model solution with DeepSeek.

[Telegram interpretation] The Industrial Internet Operating System Industry Alliance was established in Shenzhen. Institutions say AI + industrial internet will drive a scale of hundreds of thousands of industries, and the industrial AI penetration rate is expected to rise to 60% in the next three years. This company has been selected for the Ministry of Industry and Information Technology's cross-industry and cross-domain industrial internet platform for four consecutive years.

The Industrial Internet Operating System Industry Alliance was established in Shenzhen. Institutions say AI + industrial internet will drive a scale of hundreds of thousands of industries, and the industrial AI penetration rate is expected to rise to 60% in the next three years. This company has been selected for the Ministry of Industry and Information Technology's cross-industry and cross-domain industrial internet platform for four consecutive years, and another company is mainly engaged in industrial internet application development.

[Intraday Treasure Review] How to cleverly use VIP to leverage great results during a rebound? The flagship column unearthed the TOP mainline "robots" in October, and the focus stock harvested three 20cm limit-ups in 5 days!

① The column first pointed out in mid-October that the "inflection point of the mass-production verification period" for robots had arrived! The focus stock harvested three 20cm limit-ups in 5 days; ② The flagship column once again commented on data, the key infrastructure of embodied intelligence, and the stock prices of many companies in the industry continued to rise; ③ Dexterous hands are the most fiercely competitive segmented battlefield in the industry chain. The column keenly perceived its development space and took the lead in sorting out the beneficiary segments.

Related reading

Tariff game VS election campaign demands: Trump will "officially announce" that Volkswagen will build a factory in the US to win support for the midterm elections

Cailian Press Liu Rui 2026-10-25 10:00

① German Volkswagen Group will build a new factory in Georgia for its brand Audi and expand a production base in South Carolina; ② Trump will personally announce the news, hoping to publicize this "achievement" he has secured during the sprint stage of the midterm elections; ③ Volkswagen also hopes that the decision to build the factory this time can help it obtain tariff relief, because high tariffs have severely eroded its profits.

Conflict escalates! Houthi armed forces launch multiple attacks on Saudi Arabia, targeting energy facilities and airports

Cailian Press Liu Rui 2026-10-25 09:04

① On Saturday local time, the Houthi armed forces used ballistic missiles and drones to carry out seven attacks on multiple targets in Saudi Arabia; ② The US State Department said it will reduce the staffing of its embassies in four countries: Jordan, Lebanon, Qatar and the UAE.

① Moody's announced that it would maintain France's sovereign credit rating at Aa3, with the rating outlook maintained at "negative." Previously, the market generally expected Moody's to downgrade France's rating; ② At present, investors are increasingly worried about France's ballooning debt scale. Currently, the French government's debt has approached 120% of GDP, second only to Greece and Italy in the euro area.