With artificial intelligence demanding so much memory, the key commodity is likely to be in “undersupply” in 2026, investment firm Citi said on Tuesday.
“We project both of [dynamic random access memory] and NAND to turn undersupplied in 2026E, with DRAM/NAND [supply/demand] ratio at -1.8%/-4.0%, respectively,” Citi analysts said in a note to clients. “We believe AI demand shifting from AI training to AI Inferencing and edge AI devices will drive memory demand for general server & mobile DRAM as well as high bandwidth & high-density NAND such as QLC-based eSSD. Despite increasing demand for conventional memory, memory suppliers continue to prioritize [high-bandwidth memory] investment at the expense of conventional memory. Thus, we foresee overall memory S/D to tighten in 2026E, leading to upward pressure on pricing.”
As such, Citi reiterated its Buy ratings on Micron Technology (NASDAQ:MU), SanDisk (NASDAQ:SNDK), Samsung (OTCPK:SSNLF) and SK Hynix.
Delving deeper, the firm said supply and demand for dynamic random access memory should be up 17.5% and 20.1% year-over-year in 2026, highlighting the imbalance. NAND supply is expected to rise 16.5% year-over-year in 2026, but demand is expected to jump 21.4% year-over-year.
The firm also said it expects wafer-fab equipment spending to rise 11.1% year-over-year, as memory suppliers are likely to continue prioritizing high-bandwidth memory over conventional memory. In that, DRAM capex should rise 12.2% year-over-year, while NAND capex should grow 9% in 2026, the analysts added.