Memory Becomes the Binding Constraint in the AI Capital Cycle

This report argues that surging DRAM prices are emerging as the critical bottleneck in the AI buildout, reshaping capital intensity and sector profitability 

• High-speed DRAM prices have risen 400%–2,400% y/y, reflecting supply rigidity amid AI-driven demand.

• Elevated memory costs raise hurdle rates for AI capex and pressure margins across semiconductor-dependent industries, from autos to consumer electronics.

• The capital cycle favors firms with pricing power and supply access; index exposure may obscure widening dispersion.

Are AI return assumptions robust to structurally higher input costs? The paper outlines implications for portfolio construction.