Morgan Stanley: Storage stocks appear to have the lowest valuations at the cycle peak, but are actually in the most dangerous situation.

Morgan Stanley’s latest report notes that Samsung and SK Hynix currently have a forward price-to-earnings (P/E) ratio of just 3 to 4 times—seemingly cheap but potentially masking a valuation trap at the cycle’s peak. Historically, storage stocks have tended to top out ahead of earnings peaks: leading by roughly 4 months in 2008 and 2012, and about 8 months in 2018. While the AI-fueled storage supercycle remains intact, tight supply-demand, rising prices, and improving earnings still offer suppor

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