Bernstein Raises Price Targets for Samsung, Hynix, and Micron, Warns of Rising Storage Costs Driving Up AI Expenses

June 22 — Wall Street investment bank Bernstein said storage chip price hikes are now shifting from consumer electronics to AI infrastructure, a trend that could push major cloud providers to reevaluate the return on investment (ROI) of their AI data centers. In its June 22 report, Bernstein notes traditional DRAM prices have risen roughly 4.5 times since Q3 2025, while HBM hasn’t kept pace due to its annual contract pricing structure. This gap has translated to much stronger wafer revenue and gross margins for traditional DRAM makers than their HBM-focused peers, pushing storage manufacturers to kick off 2027 HBM price renegotiations with GPU and XPU suppliers. The firm projects HBM prices could jump by 100% or even 200% next year. The report adds that AI accelerator makers could add even more upward pressure on HBM prices. Take Nvidia, for instance: to hit a 75% gross margin after HBM costs climb, the chip giant would need to pass nearly four times the related cost increase onto its customers. Bernstein calculates that HBM price hikes plus extra expenses tied to Nvidia’s Vera Rubin NVL72 rack could push total capital spending at AI data centers up by around 15%. When factoring in price increases for traditional DRAM and NAND, the total impact could hover near 30%. Bernstein’s take: Cloud providers will keep pouring money into AI, but mounting costs mean a “realignment” is unavoidable. That could trigger changes to supply chain pricing, customer cost splits, and even token prices. The firm has kept its “Outperform” ratings on Samsung Electronics, SK Hynix, and Micron, while hiking their target prices sharply. Samsung’s common stock target is now 440,000 won, up from 225,000 won; SK Hynix’s target jumped to 3.3 million won from 1.15 million won; and Micron’s target rose to $1,300 from $510. Bernstein’s 2027 earnings per share (EPS) projections for the three firms are roughly 26%, 32%, and 38% above analyst consensus, respectively. The report also notes Samsung may hold a lead in HBM4 technology and could grow its market share. But a bigger slice of the HBM market doesn’t guarantee fatter profits, since traditional DRAM is far more lucrative right now. Bernstein rates KIOXIA “Underperform” because the company has no HBM business, and it’s maintained its “Outperform” tag on MediaTek. The firm added that if cloud providers skip GPU and XPU suppliers to buy HBM directly (to avoid price hikes), Asian ASIC service providers could stand to gain. Finally, the report flags that a cyclical downturn could still hit in 2028. But even once prices stabilize, Bernstein forecasts the DRAM industry’s gross margin will hover around 70% — higher than the vast majority of its historical peak cycle levels.