SK hynix US stocks surge to new highs, storage sector strengthens across the board! Goldman Sachs declares: The worst days are over
A Goldman Sachs research report ignited the storage sector, with SK Hynix soaring 7% on the US stock market in a single day to a record high. Micron and SanDisk also rose in tandem, outperforming the broader market. Goldman Sachs pointed out that a technical breakout in the storage sector, combined with low hedge fund positions, has shifted the "pain trade" direction upward. However, on the same day, the CEO of Kioxia poured cold water on the rally, stating bluntly that NAND "prices have risen enough." Amid this tug-of-war between bulls and bears, Micron's September 30 earnings report will be a key deciding factor.
Goldman Sachs turned positive on the memory chip sector, triggering a broad rally in memory stocks on Wednesday, with SK Hynix's US shares leading the gains and outperforming the broader market.
SK Hynix's US shares surged about 4% in early trading to $193.53, setting a new all-time high intraday, and closed up 7%, leading the entire memory sector. Micron Technology closed up about 2% at $1,027.77, and SanDisk closed up about 1.51% at $1,764.17, continuing the strong performance seen over the past month.
Meanwhile, the Roundhill Memory ETF, which tracks the memory sector, closed up about 1% at $61.65, whereas the S&P 500 ETF fell by about 0.5% to $761.87 on the same day, highlighting the memory sector’s significant outperformance against the broader market.
This rally was directly driven by Goldman Sachs’ latest research report. Goldman noted that Micron and SanDisk had broken out of the downward trend that had dominated all summer, and hedge fund holdings in this sector remain low, leaving room for funds to re-enter. However, on the same day, Kioxia’s CEO Hiroo Ota stated that NAND prices had already risen enough and warned that if the industry continues to aggressively push for higher prices, it could hurt its own growth, adding a layer of uncertainty to the rally.
Goldman Sachs' Shift: Technical Breakout and Low Positioning, Bullish Logic Taking Shape
In its report, Goldman Sachs characterized the current rally in memory stocks as a signal that early investors are re-entering. The bank noted that volatility in the semiconductor sector has narrowed since peaking in July, and both Micron and SanDisk have been consolidating throughout August, which Goldman interprets as early accumulation of chips in a low-positioned market corner.
On the positioning front, hedge funds significantly reduced exposure to memory stocks during summer sell-offs, which means, if technicals improve, there is ample room for rebuilding positions. Goldman believes market sentiment towards cyclical risks in semiconductors remains conservative, and for funds that are underweight in this sector, the "pain trade" has now shifted upwards.
Goldman also noted cyclical risks: memory prices, capacity expansion, and consumer spending could all reverse quickly, and technical breakouts still require confirmation from fundamental performance. Micron is set to announce its Q4 FY2026 earnings after the close on September 30, which will be a key near-term event to test the bullish thesis.
Kioxia CEO Cools the Market: NAND Price Has Risen Enough
On the same day that Goldman Sachs turned bullish, Kioxia CEO Hiroo Ota said he had instructed the sales team not to continue aggressively raising prices for data center customers, bluntly stating "prices have already gone up enough," and warning that excessive price hikes could harm the industry's own growth.
According to Bloomberg data, Kioxia’s average NAND price jumped 70% in the quarter ending June compared to the previous quarter. Ota's remarks are seen by the market as a move by major NAND suppliers to protect demand, directly addressing the pricing logic behind the current rally in memory stocks.
Ota also ruled out manufacturing-level mergers with SK Hynix, citing antitrust hurdles as well as joint production facilities co-owned by Kioxia and SanDisk. This further clarifies the competitive landscape within the memory industry.
Fundamental Support: Micron and SanDisk Both Issue Record Guidance
Despite concerns about pricing, recent company guidance has provided fundamental support for the bulls.
Micron’s latest quarterly guidance sets Q4 FY2026 revenue at a record $50 billion, non-GAAP EPS at $31, and gross margin at 86%. Management indicated that tight supply-demand dynamics for both DRAM and NAND could persist beyond calendar year 2027.
SanDisk delivered a similar message in its August earnings call by setting guidance for Q1 FY2027 at $10.3-$10.8 billion in revenue, and projected that the NAND market will exceed $300 billion in calendar 2026, a nearly threefold increase from the prior year. CEO David Goeckeler said, "Customer demand is growing faster than our supply," and expects orders to continue to be rationed beyond calendar 2027.
SK Hynix: HBM Leadership as an Independent Catalyst
Of the three, SK Hynix has a relatively independent upside catalyst. As the leading supplier of high-bandwidth memory (HBM) for AI accelerators, SK Hynix held a groundbreaking ceremony for its HBM production base in Indiana, USA, in late August, further reinforcing its US capacity expansion.
Analysts believe that any updates regarding HBM in the coming weeks could directly reinforce Goldman’s newly endorsed sector narrative.
Investors should watch for Micron’s earnings update on September 30 to confirm whether HBM capacity ramp and pricing sustainability align with the expectations set by Goldman’s research. Meanwhile, due to the memory industry’s cyclical nature, traders are advised to manage their positions prudently, especially staying alert for significant volatility around earnings, particularly if forward-looking commentary on 2027 pricing shifts.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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