Will the Memory Stock Rally Keep Going?

Scenario Analysis Beyond the HBM War

SK hynix posted 72% operating margin in a single quarter. Micron is locking in 3-to-5-year supply agreements. Samsung had a quarter where conventional DRAM profitability exceeded HBM.

Memory stocks have gone on a tear. And the market’s question is simple: can this rally continue?

This article looks somewhere else. Not total HBM demand, but where HBM pricing power holds and where it starts to crack. What determines the next round of memory stock performance is not how much HBM gets sold, but at what price.

The approach is to deep dive into HBM’s cost structure and wafer allocation economics, then analyze the strategies of both memory vendors and platform owners (NVIDIA and hyperscalers) through the lens of pricing power. From there, map the additional drivers that could sustain the memory stock rally and the conditions under which those drivers weaken, organized by time horizon.

This article is not investment advice and does not recommend buying or selling any specific stock. All investment decisions and their consequences are the responsibility of the individual investor.

HBM Is Not Coming Off the Throne

HBM is still in shortage. And that shortage is unlikely to ease anytime soon.

Most of the expensive training GPUs and high-end inference ASICs powering the AI era depend deeply on HBM-class memory. Training models get larger every year, and inference services are starting to handle longer contexts and more concurrent users. Both curves run on top of HBM.

The numbers are visible. Combined 2026 capex for the Big Tech 4 (Google, Microsoft, Meta, Amazon) is projected at roughly $725B, up approximately 77% year over year.

A large share of this goes to AI infrastructure. NVIDIA posted roughly $68B in quarterly revenue while guiding roughly $78B for the following quarter, running this system requires HBM.

Micron disclosed on its March 2026 earnings call that it has strategic customer agreements and specific commitments across a multi-year horizon, and has entered its first 5-year Strategic Capacity Agreement.

Understanding why the 3-to-5-year figure matters requires knowing how memory semiconductors have historically traded. DRAM has always been a market where prices shift every quarter. HBM has moved to a different game: lock in 3-to-5-year contracts first, then secure volume. The fundamental transaction structure of the DRAM market has changed.

So the starting point is this: HBM has not weakened. If anything, it has gotten too strong.

As the Throne Grows, So Does the Cost Problem

As HBM has gotten stronger, it has also become too expensive a component inside a single GPU. Epoch AI’s external BOM model estimates the unit cost of an NVIDIA B200/B300 at roughly $6,400, of which the estimated cost of 192GB HBM3E is roughly $3,000. HBM accounts for about 47% of one GPU’s cost.

When a single component accounts for nearly half the finished product’s cost, the product maker will either find ways to use that component more efficiently or start substituting it with something else wherever possible. The relationship between GPU and HBM is at exactly this point.

HBM Raises Questions for Memory Vendors Too

From a memory vendor’s perspective, producing one wafer of HBM is not the same as producing one wafer of conventional DRAM. HBM dies are larger, they must be stacked 12 layers high, yield degrades at each layer, and additional advanced packaging steps are required.

Industry estimates put HBM’s wafer consumption at 3 to 4x that of conventional DRAM.

DDR5 Repricing Shakes This Threshold

TrendForce initially projected Q1 conventional DRAM contract prices rising 55 to 60% QoQ, later revised to 90 to 95% QoQ. This is a price shock that disrupts wafer allocation economics.

During the same period, SK hynix recorded 72% operating margin, with conventional DRAM being the main driver.

The Real Question Is Not ASP but Profit per Wafer

Memory vendors must weigh the choice between allocating wafers to HBM or conventional DRAM. HBM needs to maintain an ASP that’s significantly higher than conventional DRAM to be commercially viable on a per-wafer basis.

Both engineering and capital allocation shortages are present in the HBM market, influencing the pricing power and sustainability of the current memory stock rally.

If you ask whether this rally can continue, the key to watch is not total HBM demand but the variables that determine HBM pricing power and how they may change over time.