From "cyclical commodities" to "strategic core assets," JPMorgan: This inventory supercycle will be "higher and longer."

AI demand is expanding from GPUs to CPUs, reshaping the fundamental logic of the global storage chip industry.

According to Chasing Wind Trading Desk, JPMorgan has significantly raised its forecast for the global storage market size in its latest research report and maintains its long-term bullish stance on the sector. The bank believes that storage chips are evolving from traditional cyclical commodities to strategic core assets for AI infrastructure.

JPMorgan has raised its forecast for the global storage market's total addressable market (TAM) in 2026–2028 by 37% to 53% compared to the March model, now expecting TAM to reach $1.7 trillion by 2028. Among this, DRAM market revenue is expected to surge from $143 billion in 2025 to $636 billion in 2026, then reach $1.237 trillion by 2028; NAND market revenue is expected to rise from $71 billion to $454.5 billion over the same period.

JPMorgan expects the supply-demand gap will further widen in 2027, theoretically offering additional upside for DRAM and NAND prices, but increased sales via long-term agreements (LTA) will make price movements more stable.

The core driver of these forecasts: Explosive growth in CPU computing demand has injected a new variable into the previously GPU-dominated AI storage narrative, while the share of storage chips in cloud service provider (CSP) hardware capex has climbed from just over ten percent at the start of the AI wave to an estimated over 50% this year. JPMorgan points out that this structural transformation is prompting the market to reevaluate storage stock valuation frameworks.

CPU demand surges, broadening storage demand drivers

JPMorgan's report notes that demand for AI computing power is accelerating from GPUs to CPUs, becoming the latest catalyst in this storage upcycle. The most unexpected highlight of the 1Q26 earnings season is the strong performance of CPU demand—CPUs handle critical control layer functions in AGI systems such as task orchestration, state management, and API execution.

Specifically, NVDA projects standalone Vera CPU sales of $20 billion in 2026; AMD has sharply raised its server CPU market growth forecast from 18% previously to more than 35% annually, estimating the market will reach $120 billion by 2030; INTC expects CPU-to-GPU ratios to narrow from about 1:8 to 1:4, and suggests that continued growth in AI agent computation needs will ultimately balance both.

From a storage industry perspective, the GPU-to-CPU ratio is dropping—from 5.4:1 in 2023 to 3.2:1 in 2025, and JPMorgan expects it to further narrow to 2.4:1 by 2028—this trend will significantly drive AI server memory demand. JPMorgan raises its server memory demand forecast for 2026–2028 by 5%–22%, emphasizing that more than 60% of the increase for 2027–2028 comes from incremental demand for AI servers (AI head nodes and standalone AI CPUs). Therefore, AI server memory demand (excluding HBM) in 2027–2028 will account for more than 30% of total DRAM demand, up from previous forecasts of just 14%.

HBM supply remains tight, ASP has upside

The supply-demand structure of the high-bandwidth memory (HBM) market also remains tight. JPMorgan raises its forecast for HBM market size in 2026–2028 by 17%–21%, expects the supply gap to persist throughout 2028, with the gap staying in double-digit percent range.

On the demand side, NVDA Blackwell GPU shipment outlook is raised to 8.9 million/9.9 million units in 2026/2027 (previously 7.5 million/7.6 million); Google TPU units forecast is increased to 4.5 million/8 million in 2026/2027; Amazon Trainium shipments are also revised up. ASIC shipments are expected to surpass commercial GPU by 2027.

In terms of pricing, JPMorgan expects the blended HBM average selling price in 2027 to rise 32% year-on-year, hitting a historic high, mainly driven by price increases of 19% for HBM3E and 15% for HBM4, while HBM4E is priced at a 61% premium to HBM3E due to extreme supply chain tightness. The allocation of HBM in DRAM wafer production is projected to rise from 24% in 2026 to 31% in 2028, further tightening supply for traditional DRAM.

For Samsung, JPMorgan raises its HBM4 market share among NVDA clients to about ten percentage points higher in 2026 (HBM4-related wallet share about 31%), thinks Samsung is ahead of competitors in HBM4 certification and has begun shipping 12-layer 48GB HBM4E samples for qualification testing.

Storage becomes CSP strategic asset, valuation framework faces reconstruction

The strategic status of storage chips in AI computing is undergoing a fundamental shift. Citing the Micron CEO, JPMorgan notes that storage is becoming a strategic asset, and stable procurement is crucial for the fast, high-quality operation of AI services.

Data shows storage’s share in CSP hardware capex has climbed sharply from just over ten percent at the start of the AI wave to over 50% expected this year and potentially 73% by 2030. Meanwhile, JPMorgan expects storage industry operating margins to be stable at historic highs of 75%–77% in 2026–2028, far exceeding 30% in 2025.

However, JPMorgan admits storage stocks currently still trade at discounted valuation levels relative to earnings, mainly because investors doubt the sustainability of storage’s value share. The report argues that higher CSP hardware capex as well as more evidence from NVDA’s $3–$4 trillion spending outlook by 2030 will help ease concerns about storage profitability. JPMorgan notes AI has created a new demand structure; traditional cyclical valuation frameworks are no longer valid, and a new valuation approach is urgently needed.

Enterprise SSDs lead NAND expansion, supply discipline supports pricing

For the NAND market, enterprise-class SSDs (eSSD) are becoming the main driver of expansion. JPMorgan expects eSSD market size in 2026 to exceed 500EB, accounting for 43% of total NAND demand, and forecasts expansion at a 52% compound annual growth rate to more than 1,100EB in the next two years. Considering ASP premiums, eSSD value TAM could exceed $300 billion over the next two years, surpassing the size of the HBM market.

On the supply side, NAND capital expenditure remains below historic peak levels, and increased SLC demand further supports supply-demand balance. JPMorgan projects cumulative NAND capex for three years at $86 billion, mostly for technology migration, with new capacity impacts occurring from the second half of 2028 at earliest. Compared to DRAM, NAND’s capex priority among top vendors is relatively lower, though early signs of 2029 new capacity projects have appeared.

Capital expenditure accelerates, China's competitive landscape evolves

Facing years of supply shortages ahead, storage manufacturers are accelerating capital expenditures.

JPMorgan expects global storage capex over the next three years to reach about $450 billion, sharply up from the December 2025 model’s $300 billion.

DRAM cumulative three-year capex is about $364 billion, with 60% of incremental capacity allocated to HBM; NAND cumulative capex is about $86 billion. EUV equipment purchases and infrastructure construction remain major bottlenecks.

For Chinese vendors, DRAM market share is expected to rise from 6% in 2025 to 8%–11% in 2028; NAND market share from 12% to 12%–16%, with capacity expansion outpacing industry average.

However, limited by focus on low-end products, the potential for value share growth is limited. Value share for DRAM and NAND is forecast at about 10% and 12% respectively in 2028.

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