Investors who sold technology stocks on fears of an AI funding crunch may want to reconsider, according to Wedbush Securities analyst Matt Bryson.
Writing after a week at the Open Compute Summit in California, Bryson found the artificial intelligence data centre supply chain operating with zero sign of the credit stress that drove the Nasdaq Composite down 4.5% last week.
Participants at the event, an annual gathering of cloud and data centre technology players, were still almost entirely focused on where to source components and how to allocate scarce supply, not on capital availability.
Cloud service providers (CSPs) actually lifted their component demand forecasts for the rest of 2026 and into 2027 in September, with Meta (META) and Microsoft (MSFT) recording the sharpest increases, the latter driven by improving traction for Copilot and the launch of its Muse platform.
Memory pricing is heading higher across the board, with both DRAM and NAND flash prices expected to rise in the mid-teens percentage range in the fourth quarter, ahead of prior estimates.
The bigger number may be in high-bandwidth memory (HBM), the specialised chips critical to Nvidia (NVDA) graphics processors, where pricing resets into 2027 could range from mid-double digits to triple digits depending on the vendor, a move Bryson says is not yet priced into analyst models.
Hard disk drive (HDD) fundamentals are equally tight, with one industry participant putting the supply shortfall at more than 400 exabytes, while pricing for customers outside long-term agreements has already jumped 40% to 50% in recent quarters.
Bryson's top pick is Silicon Motion (SIMO), the controller chip designer he believes will see significant upside in boot drive shipments and pricing into 2027, partly driven by demand from data storage specialists VAST Data and Everpure.
Read more about Cybersecurity
- 30/09/26Memory shortage could outlast new fab wave, leading tech bank says
- 27/07/26Seagate: Tightening storage supply set to boost data giant
- 26/05/26Taiwan's supply chain posts another beat as AI demand holds the line
Seagate (STX) is also favoured as the HDD vendor most likely to benefit first when long-term supply agreement pricing resets, with Bryson suggesting gross margins could eventually approach the elevated levels currently enjoyed by memory suppliers.
Western Digital (WDC) is seen as a near-term beneficiary too, after repricing its non-contract drives toward four cents per gigabyte in the third quarter.
Broadcom (AVGO) gets a passing mention for a different reason, noted as sold out of laser components until 2029, a detail that underscores just how far from a demand slowdown this supply chain actually is.
