[Morgan Stanley: Storage Stocks Often Appear Cheapest and Most Dangerous at the Cycle Peak] Golden Finance reports that on October 13, according to a Morgan Stanley report, the AI-driven storage chip supercycle is still ongoing, but the investment logic for storage stocks is changing: tight supply and demand, price increases, and improved profitability continue to provide support. However, after significant stock price increases and concentrated upward revisions of earnings expectations, optimistic forecasts have been fully priced in, limiting upside potential. The report states that the core issue is that the stronger the fundamentals, the easier it is to underestimate the risks at the cycle peak—storage stocks often peak before earnings reach their maximum, as the market tends to extrapolate current high earnings, making valuations appear cheapest during peak prosperity. Since the start of this cycle in September 2025, Asian storage stocks have cumulatively risen about ninefold, with market capitalization exceeding $1 trillion. Consensus earnings per share expectations for Asian storage companies have been revised upward by an average of 432%. Samsung and SK Hynix have forward price-to-earnings ratios of approximately 3 to 4 times, which appear cheap but may represent valuation traps near earnings peaks. To support the implied stock price potential, DRAM contract prices would need to rise approximately 70% quarter-on-quarter. Historically, storage stocks peaked about four months before earnings peaks in 2008 and 2012, and this extended to eight months in 2018. The report suggests that the turning point may be later this time, but caution is still needed regarding changes in the supply-demand dynamics after 2027.