--- title: "Wall Street Debates Intensely: Is It Right That Storage Giants Are Valued So Low?" type: "News" locale: "en" url: "https://longbridge.com/en/news/283596531.md" description: "Driven by a wave of AI demand, storage giants like Samsung Electronics and SK Hynix have seen profits surge, yet their price-to-earnings ratios remain under 6x, far below AI leaders such as NVIDIA. Bulls argue that AI has reshaped industry logic, reduced cyclicality, and made low valuations highly attractive; bears insist the cycle curse is hard to break and worry about supply glut risks. The market still needs more data, such as upcoming earnings reports, to verify the sustainability of these profits" datetime: "2026-04-22T04:20:37.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283596531.md) - [en](https://longbridge.com/en/news/283596531.md) - [zh-HK](https://longbridge.com/zh-HK/news/283596531.md) --- # Wall Street Debates Intensely: Is It Right That Storage Giants Are Valued So Low? Storage chip giants are posting historic profits driven by an AI-fueled demand wave, yet their stock valuations remain far below other AI chip leaders. This significant gap is sparking an intense debate on Wall Street over whether the storage industry has entered a "super cycle." Samsung Electronics is expected to see net profit growth of 400% this year, while SK Hynix is projected to grow nearly 300%, both significantly outpacing TSMC's growth of around 50%. However, **the forward P/E ratios for these two storage giants are under 6x, compared to nearly 20x for TSMC and a high 22x for NVIDIA**. This scissors difference between profits and valuations lies at the heart of the controversy. On April 22, Bloomberg reported that bulls believe AI-driven demand for storage has spread from high-bandwidth memory to general products like DRAM and flash memory, with **supply shortages and soaring prices coexisting as the storage industry enters a structural new paradigm**; bears maintain that **storage profits have historically fluctuated sharply with economic cycles, and low valuations represent a reasonable pricing of this historical pattern until the market receives more evidence to grant higher premiums.** Analysts point out that **SK Hynix will report earnings this Thursday, followed closely by Samsung**. The latest performance data from these two companies could become the next critical node in this valuation debate. ## Profit Explosion, Yet Valuation Stands Still The stock performance of storage shares has been impressive. Since late August last year, Samsung's stock has risen cumulatively by about two times, SK Hynix by three times, while TSMC rose by approximately 77% during the same period. However, the gap in valuation multiples remains vast. The forward P/E ratios for Samsung and SK Hynix are both below 6x, while those for US-based Micron Technology Inc. and Japan's Kioxia Holdings Corp. are also below 10x. In comparison, TSMC stands at around 20x and NVIDIA at around 22x. **In terms of absolute profit scale, the magnitude of storage giants is equally formidable.** Samsung's net profit is expected to reach $151 billion this year, and SK Hynix is expected to reach $115 billion, both exceeding TSMC's estimated $81 billion. Analysts suggest that **larger profit scales paired with lower valuations—this is precisely the most attractive investment logic in the eyes of bulls.** ## Bulls: AI Reshapes the Underlying Logic of the Storage Industry Investors supporting the revaluation of storage stocks believe that the rise of AI has fundamentally changed the business model of this industry. Dave Mazza, CEO of Roundhill Investments, stated that storage "is now deeply tied to the technical roadmap of AI accelerators, with co-design directly embedded." He further pointed out that storage companies are increasingly signing long-term contracts with hyperscale cloud providers, "which fundamentally changes the cyclical characteristics of this business." Molly Pieroni, President of Yacktman Asset Management based in Texas, holds preferred stock in Samsung and does not hold NVIDIA due to its high valuation. She stated that for Samsung, "even if results are not outstanding, they are sufficient to support current valuations," and even if the stock price doubles again, "the valuation remains very attractive relative to other companies." AI-driven surging demand has spread from high-bandwidth memory to broader products like DRAM and flash memory, triggering supply shortages and price spikes, further strengthening bulls' confidence in the sustainability of demand. ## Bears: The Cycle Curse Is Hard to Break However, skeptics are unconvinced. Their core argument is: **Historically, storage industry profits have been extremely dependent on macroeconomic cycles; once demand slows, supply often expands significantly, leading to a price collapse.** Jorry Noeddekaer, Head of Global Emerging Markets and Asia Business at Polar Capital managing over $40 billion in assets and based in London, admits the storage industry is in "some kind of new paradigm" but clearly states: > "We do not agree that storage will never experience cyclical fluctuations again." His fund has reduced some storage positions amid recent strong rebounds, believing the current risk-reward ratio is less attractive than in the early stages of the cycle, and noting that TSMC possesses "more structural underlying growth" and faces less competitive pressure. Christine Phillpotts, Emerging Markets Equity Portfolio Manager at Ariel Investments, also remains cautious. She stated, "At the end of the day, the dispute centers on whether the pace of supply expansion can match demand," pointing out that in past cycles, supply often expanded ahead of weakening demand, "which is absolutely a risk we are closely monitoring." ## The Market Needs Time to "Believe" Even relatively neutral observers believe that the revaluation of storage stocks requires time to accumulate. Tom Tully, Portfolio Manager at New York's Aperture Investors, noted, "Looking at the history of the storage industry, the cyclicality of profits has been too strong," and he believes "the market needs time to truly believe these returns can be sustained." Some investors believe that once the market sees substantive evidence that storage profit growth is more structural than cyclical, valuations may gradually catch up with other AI chip stocks. Analysts suggest that **the upcoming earnings reports from SK Hynix and Samsung will serve as an important window to test this logic—but to completely reverse the market's deep-seated impression of the storage industry as "commodities," perhaps more rounds of continuous data verification will be needed.** ### Related Stocks - [SSNGY.US](https://longbridge.com/en/quote/SSNGY.US.md) - [SMSN.UK](https://longbridge.com/en/quote/SMSN.UK.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [07709.HK](https://longbridge.com/en/quote/07709.HK.md) - [DRAM.US](https://longbridge.com/en/quote/DRAM.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [TSM.US](https://longbridge.com/en/quote/TSM.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [MU.US](https://longbridge.com/en/quote/MU.US.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) ## Related News & Research - [Anthropic won't own MCP 'design flaw' putting 200K servers at risk, researchers say](https://longbridge.com/en/news/283166269.md) - [Prediction: This Artificial Intelligence (AI) Growth Stock Will Be the Nasdaq's Biggest Winner Over the Next 12 Months](https://longbridge.com/en/news/283435510.md) - [SK hynix Begins Mass Production of 192GB SOCAMM2 'Setting a New Standard for AI Server Memory Performance'](https://longbridge.com/en/news/283271082.md) - [AI Coding Startup Cursor Set For $2 Billion Funding Round, Nearly Doubling Valuation With Nvidia Backing: Report](https://longbridge.com/en/news/283217063.md) - [Top ASE Technology Director Offloads a Major Stake in Stunning Market Move](https://longbridge.com/en/news/282926201.md)