Morgan Stanley: NVDA Memory Cuts and Strong SIA Data in April
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Morgan Stanley: NVDA Memory Cuts and Strong SIA Data in April
Morgan Stanley releases a weekly semiconductor industry report, noting that NVIDIA has reduced the memory content of Vera Rubin rack due to memory shortages and expects strong demand for DRAM and NAND memory with significant future growth.
- NVIDIA reduces the memory content of Vera Rubin rack due to memory shortages
- Strong demand for DRAM and NAND memory, prices continue to rise
- Morgan Stanley raises its growth forecast for the semiconductor industry in 2026
Report interpretation
Overview
This weekly semiconductor industry report from Morgan Stanley analyzes NVIDIA's reduction of Vera Rubin rack memory content due to memory shortages and points out strong demand for DRAM and NAND memory with rising prices. The report also mentions an upward revision to the growth forecast for the semiconductor industry in 2026, especially regarding continued growth in demand for DRAM and NAND.
Core views
In the report, Morgan Stanley notes that NVIDIA has reduced the memory content of Vera Rubin rack due to memory shortages, decreasing it from 55 TB to 28 TB, indicating tight memory supply. The report states that the demand for DRAM and NAND memory is strong, with prices continuing to rise. DRAM sales grew year-over-year by 375.3%, while NAND sales increased by 366.0%. Additionally, the report forecasts 106.4% growth for the semiconductor industry in 2026, particularly highlighting the stock performances of NVIDIA, AMD, and Intel as noteworthy.
Analysis framework
Morgan Stanley analyzed NVIDIA's memory cuts along with market data on DRAM and NAND demand, combining historical data and industry trends to conclude that tight memory supply has led to price increases and strong demand, forecasting significant future growth. The institution used a supply-demand framework to analyze the market, considering memory shortages as the primary driver of current market conditions while also accounting for industry cyclicality and technological trends.
Methodology notes
Supply-Demand Framework
The supply-demand framework is used to analyze the supply and demand relationship in the market, helping to predict price trends and market directions. Morgan Stanley inferred price increases and industry growth prospects by analyzing tight memory supply and robust demand.
Relative Valuation Method
The relative valuation method compares the valuation levels of different companies, helping investors judge the attractiveness of stocks. Morgan Stanley evaluated investment value by comparing valuation indicators of NVIDIA with other companies.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- NVIDIA CORP (NVDA.US)Benefits from memory shortages and strong market demand
- Strengths
- Increased demand due to memory shortages, price increases
- Weaknesses
- Memory supply may limit growth
- Comparison
- Compared to AMD and Intel, NVIDIA holds a larger share in the memory market
- Risks
- Insufficient memory supply may affect business
- Micron Technology Inc (MU.US)Benefits from strong memory market demand
- Strengths
- Rising memory prices bring profit growth
- Weaknesses
- Limited supply may impact profits
- Comparison
- Compared to NVIDIA, MU holds a smaller share in the memory market
- Risks
- Insufficient supply may lead to revenue decline
- Advanced Micro Devices (AMD.US)Benefits from strong memory market demand
- Strengths
- Rising memory prices bring profit growth
- Weaknesses
- Limited supply may impact profits
- Comparison
- Compared to NVIDIA, AMD holds a smaller share in the memory market
- Risks
- Insufficient supply may lead to revenue decline
Key data
- DRAM Sales Growth Rate (2026)375.3%Above market expectations
- NAND Sales Growth Rate (2026)366.0%Above market expectations
- NVIDIA Stock Price (June 5, 2026)205.10Target price is $288.00
- DRAM Price Increase (2026)15.3%Above market average
- NAND Price Increase (2026)21.0%Above market average
Impact & implications
Morgan Stanley believes that tight memory supply will continue to impact the semiconductor industry, particularly keeping DRAM and NAND prices high. Companies such as NVIDIA, AMD, and Intel are expected to benefit significantly from this trend. Investors should closely monitor the performance and market dynamics of these companies.
Risks
- Insufficient memory supply may impact company performance
- Intensified market competition may lead to price declines
What to watch
- Memory supply situation
- Performance of companies like NVIDIA, AMD, Intel
- Price changes in DRAM and NAND markets