Arvind Krishna of IBM reports that corporate customers are shifting capital expenditures toward servers, storage, and memory to secure AI infrastructure.

Arvind Krishna, the CEO of IBM, reported that corporate customers are increasingly shifting their quarterly capital expenditures toward servers, storage, and memory. This shift aims to secure supply-constrained infrastructure ahead of anticipated price increases. Following this announcement, memory stocks initially rallied on Tuesday. However, the sector experienced a sharp reversal on Wednesday and overnight as investors moved quickly to lock in profits. Leading memory and storage stocks, including Micron, SanDisk, SK hynix, and Western Digital, saw declines of between 0.6% and 4% overnight. This selloff occurred despite broader market gains and was attributed to high valuations and profit-taking rather than a decline in fundamental demand. Analysts remain bullish on the long-term outlook for AI-related memory. Experts note that the supply of high-bandwidth memory is expected to remain tight through 2027. This limited supply allows major manufacturers to maintain strong pricing power as cloud providers compete to build out AI infrastructure.

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