Guolian Minsheng Securities: Continues to be bullish on this storage super cycle.

Guolian Minsheng Securities released a research report stating that it continues to be bullish on this storage super cycle, with high AI demand prosperity, strengthened supply constraints, long-term agreements locking in profits, and improved shareholder returns jointly driving the upward shift in the profit center. On the demand side, AI training is accelerating its evolution toward inference and Agentic AI, which not only continues to drive HBM demand but also significantly boosts server DRAM and enterprise SSD configuration demand, with storage demand spreading from single HBM to broader data center storage; at the same time, constraints in advanced processes, packaging and testing, and capacity switching keep supply expansion relatively limited, and DRAM and NAND prices are still expected to continue rising from a high base, with the sustainability of price increases significantly stronger than traditional cycles. On the supply side, leading storage manufacturers are locking in future years' procurement volumes and price ranges in advance through LTA/SCA. Micron already has more than 35% of its pre-2030 revenue covered by long-term agreements, significantly improving industry profit visibility. Supported by strong profitability and free cash flow, storage manufacturers' shareholder returns are improving in tandem, and Micron has explicitly proposed returning 100% of excess cash to shareholders over the long term. The bank believes that AI is driving a revaluation of the storage industry from a strong cycle to "high prosperity + high certainty + high shareholder returns," and it is still in the stage of upward revision of super-cycle profit expectations, and it continues to be bullish on the storage industry chain. Recommendations: 1) AI chips NVDA, AVGO, MRVL, CBRS; 2) storage MU, SNDK, Samsung, SK Hynix, Kioxia; 3) MLCC Samsung Electro-Mechanics, Murata Manufacturing, Taiyo Yuden; 4) substrates IBIDEN; 5) CPUs INTC, AMD, ARM, Qualcomm. The main views of Guolian Minsheng Securities are as follows: TrendForce expects AI server demand to support continued increases in 26Q4 storage contract prices. TrendForce stated that in 26Q4 DRAM suppliers will still prioritize allocating advanced process capacity to high-performance server products, and the overall DRAM market will remain in short supply, but the pace of contract price increases is expected to slow somewhat, with traditional DRAM prices expected to rise 10-15% quarter over quarter. The NAND Flash market shows a divergent pattern of accelerating AI demand and weak consumer demand, while prices in various segments are still generally rising, with overall NAND Flash contract prices expected to rise 15-20% quarter over quarter. Overseas technology company updates Micron released its FY26Q4 financial report, with revenue, gross margin, and EPS all exceeding previous guidance. FY26Q4 revenue was $54.2 billion, up 379% year over year and up 31% quarter over quarter; Non-GAAP EPS was $33.42, up 33% quarter over quarter; Non-GAAP gross margin was 87%, up 2.1 percentage points quarter over quarter. DRAM and NAND both saw simultaneous increases in volume and price. DRAM revenue was $39.8 billion, up 27% quarter over quarter, with bit shipments up in the mid-single digits quarter over quarter and prices up about 20% quarter over quarter; NAND revenue was $14.1 billion, up 42% quarter over quarter, with bit shipments up about 10% quarter over quarter and prices up about 30% quarter over quarter. Data center SSD revenue was about $10 billion, accounting for more than two-thirds of NAND revenue. HBM quarterly revenue growth was higher than the company overall, and the vast majority of 2027 HBM bit supply has already been contracted, with prices significantly higher year over year. FY27Q1 revenue and EPS are expected to continue growing, with gross margin expected to be the low point for the year. The company guides revenue of $61.5 billion $1.5 billion, with the midpoint up about 13.4% quarter over quarter; Non-GAAP EPS of $38.15 $1, with the midpoint up about 14.2% quarter over quarter; Non-GAAP gross margin of about 86.25%, down 0.75 percentage points quarter over quarter. Contract scale continues to expand, and forward sales volumes and price floors are becoming clearer. The company has signed 26 SCA long-term agreements, expected to cover more than 35% of revenue through 2030; about three-quarters of the expected contract revenue already has a clear pricing framework, with most having price floors and ceilings. Customer financial commitments reached $32 billion, the vast majority of which are cash deposits. Therefore, even if executed at contract floor prices, margins will still be significantly higher than peak levels of previous cycles; at the same time, negotiations involving pricing for new long-term agreements are proceeding at higher price levels. Management plans to increase capital returns starting December 9, and expects the cash balance to be close to the target level by the end of FY27Q1, after which excess cash will mainly be returned through buybacks, and it plans to apply for additional buyback authorization. The long-term goal is to return 100% of excess cash to shareholders. AMD will acquire World Labs to advance next-generation AI computing. On September 28, 2026, AMD announced that it has signed a definitive agreement to acquire World Labs, an artificial intelligence model and research laboratory led by AI pioneer Dr. Fei-Fei Li. This acquisition will bring AMD a world-class team of AI researchers and model experts, further enhancing AMD's ability to develop AI hardware, software, and systems around emerging AI models and application needs. The transaction will be all-stock, with a valuation of about $8.2 billion, and is expected to close by the end of 2026 after obtaining regulatory approval and satisfying other customary closing conditions. Risk warnings: AI development falling short of expectations; AI commercialization falling short of expectations; macroeconomic growth falling short of expectations, etc.