KawzInvests
Co-Author of Asymmetrical Bets, Photonics/Optical Cycle, AI/Defense/Space
Micron and Sandisk are setting the price on Nvidia's growth ceiling, since memory supply, not demand, now limits Nvidia. Nvidia guided about 70% fiscal 2028 revenue growth, calling the outlook supply constrained, after Q2 revenue of $96 billion. CFO Colette Kress said memory prices face extreme conditions, already above prior expectations and headed higher next year, and Nvidia guided Q4 gross margin down to 71-72% from 75% on memory costs. x.comÂ
Memory stocks Micron and SanDisk have material upside as revenues keep climbing over the next eight quarters, with earnings and free cash flow following, despite the trendy bearishness. DRAM and NAND spot prices have rallied in recent weeks, and global DRAM sales are projected to rise from $573B in 2026 to $847B in 2027 and $917B in 2028. ASPs are higher in 2027 than 2026, and Hynix's Q3 ASP is up 25% sequentially. Even if market cap to TAM multiples contract to 2.8x, upside remains. x.comÂ
Micron and SK hynix pricing in a memory shortage past 2030 extends the memory-cycle case beyond the Street's 2028 expectation. SK hynix's record quarter adds evidence: per Wall St Engine, revenue rose 328% to $78.9B, operating profit rose 632% to $62.8B, and operating margin hit 80%. Agentic and physical AI could add demand as they roll out. x.com x.comÂ
Micron could benefit if memory demand remains strong through 2029. Nvidia CEO Jensen Huang said he sees no sign of demand slowing by then and that "you can always use more." x.comÂ
Inflation, rising rates, Chinese competition and rising AI-related financial costs are pressuring the memory market. Micron, Samsung and SK hynix look exposed; waiting for the cycle to turn. x.com x.comÂ
Rising memory contract prices strengthen the case for memory stocks still far below their highs. JPMorgan forecasts Q4 DRAM prices up 13% and NAND up 18%; Micron is 28% below its 52-week high, Seagate 44%, Sandisk 47% and Western Digital 55%. x.comÂ
A worsening memory shortage in 2027 could favor Micron, SanDisk and SK hynix as AI stocks. Samsung warns that the shortage will worsen then. x.comÂ
Memory's high margins are less durable than those of Nvidia or AMD because memory is a perfect substitute across suppliers and their chips are not. Memory margins have also risen far more than those names', so while chipmakers may eventually see some compression too, it should be smaller than in memory. x.comÂ
A memory-chip shortage lasting until 2030 is good for Nvidia. SK hynix expects that shortage and reports a 632% profit jump. x.comÂ
The memory supercycle for Micron, Sandisk and SK hynix keeps getting validated as scarce memory reprices the entire AI stack. Nvidia is raising prices about 15%, including on Vera Rubin and Grace Blackwell chips, after Apple blamed memory for weak guidance, and with a $1T order book nobody is cancelling. Earnings this week could drive heavy rotation back into semis. x.comÂ
Micron's projections are set so high that even great years may not be enough to meet them. Samsung's Q3 results show the risk: revenue of $145.6B missed the $150.7B estimate, and operating profit of $80.2B missed $81.1B. x.comÂ
Agentic AI's repeated context favors cache memory and storage demand for Micron, SK hynix and Sandisk over fresh GPU computation. Per @demian_ai, about 95% of input tokens for DeepSeek V4.1 Flash on OpenRouter were cache hits; storage matters unless routing and caching keep almost everything in GPU memory. New products such as 3D DRAM and HBM-on-logic could be the final trigger for a full memory-stock re-rating. x.com x.comÂ
