MW Memory-chip stocks are still quite cheap - especially if you look overseas
By Britney Nguyen and Emily Bary
Despite strong gains this year, Samsung Electronics and SK Hynix shares are even less expensive than their U.S. counterparts
Samsung's memory products are expected to play a role in Nvidia's next chips.
Memory chips are having a moment - one that's rippling across global markets.
Not only are memory and storage stocks some of the best performers this year, with the major U.S. players up between 46% and 173% in under a month and a half, but also investors are increasingly worried that the good times for manufacturers like Micron Technology $(MU)$ will mean pain for companies on the other end of the electronics supply chain.
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As artificial-intelligence players demand more high-bandwidth memory products, companies like Micron, Western Digital $(WDC)$, Sandisk $(SNDK)$ and Seagate Technology $(STX)$ have found themselves struggling to meet demand for memory chips across the board. And because they've been hesitant to add capacity for fear of creating a supply glut down the road, they've been able to raise prices dramatically on the supply they do have. A Mizuho analyst wrote recently that prices for NAND memory could be up 70% to 80% in the first quarter from just three months earlier.
But even with the explosive rise in memory prices, some memory stocks are still cheap. And that's especially the case if you expand your search to overseas.
Shares of Kioxia Holdings (JP:285A) in Japan as well as Samsung Electronics (KR:005930) and SK Hynix (KR:000660) in South Korea have been red hot as well. Kioxia's stock has more than doubled so far in 2026, while Samsung's is up more than 50% and SK Hynix's is up 35%.
The momentum for the Korean memory stocks has been so strong that those two companies alone account for more than half the KOSPI Composite Index's market-cap gains so far this year, according to Dow Jones Market Data. That's driven unprecedented interest in Korean markets: A BofA report just flagged the biggest weekly inflow ever to South Korean equities.
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Yet the multiples for those stocks are relatively low. Kioxia trades at 9.1 times forward earnings, compared to 5.5 times for SK Hynix and 8.6 times for Samsung, according to Dow Jones Market Data. Those are all lower than the 10.6x and 9.6x multiples for Micron and Sandisk, respectively, and well below, say, the 28.6x multiple for Advanced Micro Devices shares $(AMD)$. The S&P 500 SPX trades at 21.7 times forward earnings.
Micron could grow more than double earnings per share this calendar year and show further growth next year. But memory stocks like Micron don't tend to trade at multiples seen elsewhere in the chip sector because investors are thinking about earnings potential not only in good periods but also in bad ones. The memory market is historically cyclical: For instance, Micron reported a loss for fiscal 2023, partly because slower demand hurt its pricing power.
International memory stocks trade at a discount to their U.S, counterparts, as highlighted by Dan Loeb, whose Third Point owns positions in SK Hynix and SK Square (KR:402340) - a holding company that has a stake in SK Hynix and whose stock trades even more inexpensively.
The investment in SK Square was mostly due to a "favorable view" of SK Hynix, Loeb said in a letter to Third Point investors last week. Since the investment was made last summer, Loeb said SK Hynix's "intrinsic and market value" has grown thanks to the supply-demand imbalance in the memory market. But SK Hynix's stock still trades at a "low valuation," he noted.
The AI-driven supply tightness has sent prices for offerings such as DDR5 and server dynamic random-access memory higher, Loeb wrote, which is "disproportionately benefitting SK Hynix's premium-weighted mix."
Additionally, Loeb thinks the South Korean chip maker "has solidified its leadership" in the market for high-bandwidth memory, which has become essential to more advanced AI chips such as Nvidia's graphics processing units. As AI models get larger context windows, or the ability to process more data at one time, they need more memory capacity to handle inference.
He pointed to reports that SK Hynix has become Microsoft's $(MSFT)$ exclusive HBM supplier for its in-house AI chips, and its position providing a large part of Nvidia's supply of the next-generation HBM4 for its upcoming Vera Rubin platform.
Unlike its HBM competitors Samsung and Micron, "SK Hynix retains clear time-to-market and customer-qualification advantages," Loeb said, noting its long-term supply agreements and expanding capacity.
Earlier this week, Samsung announced that it has started mass production of its sixth-generation HBM4, and that commercial products are being shipped to customers. The South Korean chip maker is expected to be part of the supply for Nvidia's (NVDA) Rubin GPUs, as is Micron.
More from MarketWatch: Nvidia's stock needs a spark. Here's how it can generate one.
Meanwhile, memory and storage products are expected to be in tight demand for the next few quarters. Earlier this week, Deutsche Bank analyst Melissa Weathers said she expects DRAM memory to be supply constrained through next year into 2028, including from demand for HBM, which is made by stacking DRAM.
Chip fabs take at least two years to come online, Weathers noted, and existing sites are limited from adding more clean room space, which is where chips are manufactured. However, Weathers said some relief could come next year as companies try to add capacity.
Read more: Here's how Micron's stock can hit $500, according to Deutsche Bank
-Britney Nguyen -Emily Bary
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February 14, 2026 09:27 ET (14:27 GMT)
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