Morgan Stanley's research report suggests that DRAM prices are likely to peak in Q4 2026 (4Q26), followed by a sharp cyclical decline. The chart illustrates several historical cycles over the past 15 years (2010-2026). Every time the blue line (price) and yellow line (valuation) hit extreme highs, a rapid mean reversion follows. Morgan Stanley believes that the current super-strong memory bull market, driven by the AI wave (e.g., HBM high-bandwidth memory, AI server demand) and tight production capacity, has already passed its most frenzied phase. The YoY growth rate of contract prices is now declining from the cyclical peak. The chart caption mentions: “while valuation (NTM P/B) has yet to re-rate.” In the chip cycle, stock prices and valuations (yellow line) often peak several months ahead of actual chip prices (blue line). Although valuations have started to pull back, Morgan Stanley believes the market’s overall valuation adjustment (removing excess froth) for the memory chip sector is not yet complete. As prices peak in Q4, chip stock valuations may face further correction pressure. Morgan Stanley predicts that by 2027, DRAM price YoY growth will "crash through" back into the 100%-200% range. This implies that even if memory prices don’t absolutely plummet in 2027, their explosive growth momentum will significantly slow down, marking the end of the semiconductor memory sector’s golden era for the time being. Morgan Stanley is describing storage price trends here, but the capital market often reacts ahead of the physical world.