Storage Sector Enters Robust New Cycle: Wedbush Sees Price Hikes Up to 150%

Prominent Wall Street investment firm Wedbush recently highlighted that a surge in memory demand driven by Artificial Intelligence (AI) infrastructure, coupled with severe supply constraints, is set to push prices for certain memory products up by more than 100%.

 

In a report released Monday, Wedbush analysts noted that DRAM and NAND prices are rising rapidly. They project that price increases in the first half of 2026 could reach "triple-digit" levels compared to the fourth quarter of 2025. Specifically, DRAM prices are expected to surge by 130% to 150%, with NAND increases trailing closely behind—a clear signal that the storage market has entered a powerful new growth cycle.

 

This trend serves as a significant tailwind for memory manufacturers such as Micron Technology, Seagate, and Western Digital.

 

"The improvement in the memory market was expected," Wedbush stated. "However, the magnitude of this spike underscores the sustained and significant recovery since the first quarter. This aligns perfectly with our recent positive channel checks and Micron’s stellar financial results and guidance."

 

Micron Technology's latest earnings report, released last week, showed fiscal second-quarter revenue nearly tripling to $23.86 billion, far exceeding the $20.07 billion expected by analysts. Adjusted earnings per share (EPS) reached $12.20, crushing the $9.31 estimate. For the third fiscal quarter, the company issued blockbuster guidance, projecting revenue of approximately $33.5 billion—a more than 200% year-over-year increase—and an adjusted EPS of $19.15, both well above Wall Street’s consensus.

 

The supply crunch is also rippling through other parts of the hardware ecosystem. Wedbush noted that as demand continues to outstrip supply, hard drive (HDD) manufacturers are likely to demand higher contract prices.

 

"Given this backdrop and the widening supply-demand gap, we believe HDD vendors will adopt a far more aggressive stance on future contract pricing than previously suggested," Wedbush added.

 

Meanwhile, Nvidia appears exceptionally well-positioned to secure the components required for its AI systems, thanks to its formidable supply chain relationships. CEO Jensen Huang recently projected that orders for Nvidia’s Blackwell and Rubin systems could reach $1 trillion by 2027.

 

Wedbush points out that this ambitious target is supported by Nvidia’s expanding collaborations—including last week’s deal with Amazon—positive demand checks for 2026–2027, and the company's best-in-class ability to source critical components.

 

However, the strength is not uniform across all tech sectors. Wedbush noted that industry sentiment regarding this year's PC and smartphone markets has turned increasingly bearish.

 

While many PC-related firms are buoyed by their exposure to the server market, overall sentiment is weakening. Industry feedback suggests that—excluding Apple—year-over-year shipments for PCs and mobile phones could decline by as much as 20% as rising component costs and memory shortages weigh on consumer demand.