Key Takeaways:
- JPMorgan raised its 2026-2028 storage market forecast by as much as 53%
- The bank sees further upside for Magnificent Seven stocks after their correction
- Storage supply constraints are expected to persist until early 2028
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JPMorgan lifts storage forecast 53%, backs Magnificent Seven stocks
JPMorgan raised its global storage market forecast as much as 53% and maintained a bullish view on Magnificent Seven stocks, the bank said Monday.
"AI has brought an entirely new demand structure, rendering traditional cyclical valuation frameworks obsolete," JPMorgan said in the report.
The bank projects total global storage capital expenditure over the next three years at about $450 billion, with DRAM accounting for roughly $364 billion. Sixty percent of incremental DRAM capacity will go to high-bandwidth memory. The total storage market is expected to reach $1.7 trillion by 2028, up from a prior forecast. DRAM market revenue alone is projected to jump from $143 billion in 2025 to $636 billion in 2026 and $1.237 trillion by 2028.
On the Magnificent Seven, JPMorgan said the group has room to run after a year-to-date correction, without specifying a target. The dual endorsement from one of Wall Street's largest banks could drive renewed institutional flows into mega-cap tech and memory stocks. Storage supply constraints are expected to last until early 2028, supporting pricing power for makers of DRAM, NAND and HBM products.
JPMorgan raised its HBM market size forecast for 2026 through 2028 by 17% to 21%, projecting supply-demand gaps will persist throughout 2028. The blended average selling price for HBM in 2027 is expected to rise 32% year over year, reaching an all-time high.
The share of storage in cloud service provider hardware capital expenditure has climbed from just over 10% early in the AI investment cycle to more than 50% this year, JPMorgan estimates. That figure could reach 73% by 2030. The bank forecasts the storage industry's operating margin will stabilize at 75% to 77% between 2026 and 2028.
Enterprise solid-state drives are becoming the core driver of NAND market expansion. JPMorgan expects the eSSD market to exceed 500 exabytes in 2026, accounting for 43% of total NAND demand, and projects it will grow at a compound annual rate of 52% to more than 1,100 exabytes over the next two years. The total value of the eSSD market is expected to surpass $300 billion over that period.
AI server memory demand excluding HBM is expected to account for more than 30% of total DRAM demand in 2027 and 2028, JPMorgan said, up from a prior estimate of 14%. The bank noted that memory stocks still trade at a discount to earnings, as investors question whether storage's value share can continue to rise.
The report shows JPMorgan sees AI-driven demand as structurally reshaping both the storage and mega-cap tech sectors, rather than creating a cyclical peak. Investors will watch upcoming earnings from memory makers and Mag 7 companies for confirmation of the bank's thesis.
This article is for informational purposes only and does not constitute investment advice.
[1] BofA doubles down on cautious S&P 500 view for rest of 2026 - thestreet.com[2] The Storage Industry Ushers in a Moment of Valuation Reconstruction, with JPMorgan Bullish on Market Prospects for 2026–2028[3] Where is the next bull market? JPMorgan: US mega-cap 'Magnificent Seven' stocks and the memory/storage sector are expected to continue rising. - 富途牛牛
