This article first appeared on GuruFocus.
Mizuho Securities said the recent declines in Micron Technology (NASDAQ:MU) and Sandisk (NASDAQ:SNDK) present buying opportunities, arguing that investor concerns over “peak memory” may be overblown.
Analyst Vijay Rakesh maintained Outperform ratings on both stocks, with price targets of $530 for Micron and $710 for Sandisk.
Rakesh pointed to several examples where efficiency gains led to increased demand rather than a slowdown, a pattern known as Jevons paradox. He cited the launch of DeepSeek in 2025, which sparked fears of a GPU slowdown but was followed by accelerated AI growth.
The analyst also referenced Google’s TurboQuant algorithms, first explored in 2025, with recent results showing AI inference performance gains. He believes that key-value cache compression, a technique for improving large language model efficiency, could enable larger models, faster inference and better tokenomics, potentially spurring more spending.
Rakesh drew parallels to past technology shifts, including the move from copper to optical networking with higher bandwidth, which he said could drive higher AI server capital expenditures rather than reduce it.
The analyst’s note suggests that recent weakness in memory chip stocks may reflect exaggerated fears about a peak in the cycle.
