Theresa Perrin
Self-Directed Investor & Trader, Former Hospice Nurse
Memory-cost pressure, weak volumes and weak services should make Apple's quarter bad, giving the short a chance to work on this quarter alone. Other hardware companies this quarter also point to weakness, though Apple has been a terrible short so far. x.com x.comÂ
Apple stock remains unattractive as memory costs threaten demand and supply. Nikkei reports memory-driven iPhone price hikes dampened demand, with October Pro and Pro Max component orders cut at least 15%; Chinese media instead cite a slight Pro dip and Pro Max rise. Apple may still lack long-term memory supply deals, according to market chatter; Korean analysts expect sharp NAND and DRAM price hikes for Apple early next year. x.com x.com x.com x.comÂ
Apple is the obvious flight to safety in US markets because it wins on access to cheap memory and on open-source AI. x.comÂ
Cheap, open-source AI looks incompatible with expensive data-center buildouts that pay very high chip prices, one reason to stay short the iShares Semiconductor ETF. Companies are racing for cheaper AI options, and @financialjuice reports Apple is discussing buying memory chips from Chinese companies, suppliers not in the ETF, as others presumably will too. x.com x.comÂ
CXMT's refusal to sell DDR5 to a Taiwanese server maker adds evidence that it will not flood the memory market with cheap supply and pressure prices for Samsung Electronics and SK hynix. Per Taiwanese media, a veteran industry analyst also said Apple found CXMT's memory as expensive as the three major suppliers' and that CXMT had no intention of lowering prices. x.comÂ
Apple and Intel are working together, and Trump is signaling where to put money. x.comÂ
Memory stocks Micron, SanDisk and SK hynix look set to benefit as the US government opposes Apple buying memory chips from Chinese companies, per Commerce Secretary Lutnick via the WSJ. Memory also has many catalysts on the horizon. x.comÂ
The US government urging Apple to stop sourcing memory chips from China, per Kalshi, makes Chinese memory maker CXMT an obvious short. The pairing is short Apple and CXMT, long Micron and Sandisk. x.comÂ
Apple is increasingly rewarded as a good steward of capital in the AI race, an AI beneficiary and a safe haven from the capex wars. In a recession triggered by an AI bubble popping, Apple would be the ultimate consumer staple and surprise to the upside, potentially scooping up AI infrastructure cheaply and benefiting from local LLMs. x.comÂ
Apple was the easier short into earnings because rising memory prices squeeze its margins and price hikes pulled sales forward. x.comÂ