To The Moon

The contradiction exists because different parts of the memory market are being priced very differently.

The bearish case (cycle peak):

Memory has always been one of the most cyclical semiconductor industries. Strong profits eventually encourage capacity expansion, leading to oversupply and falling prices.

A 30% decline in Micron despite solid earnings suggests investors are looking beyond today's results and worrying about 2027 to 2028.

SanDisk's roughly 580% gain this year means expectations are extremely high. Even excellent execution may not justify such valuations indefinitely.

HBM (High Bandwidth Memory) is a hot segment, but it is still only one part of the broader memory market.

The bullish case (AI supercycle):

AI demand is fundamentally different from previous PC or smartphone cycles because AI accelerators require enormous amounts of HBM and high-performance memory.

Major cloud providers continue investing heavily in AI infrastructure, supporting demand for premium memory.

Micron and SK Hynix have both indicated strong HBM demand and secured long-term customer commitments, providing more revenue visibility than in past cycles.

My interpretation: This looks more like a mid-cycle correction than the end of the AI memory story, but that does not mean every stock is attractive.

Micron: Most attractive among the large memory names. A 30% correction has reduced some of the optimism, while AI exposure remains strong.

SK Hynix: Excellent HBM positioning, but investors should be mindful of valuation and any ADR premium.

SanDisk: Operationally strong, but after a 580% rally, expectations leave much less room for disappointment.

The key question is no longer "Will AI drive memory demand?". That answer still appears to be yes. The question is "How much future growth is already reflected in today's share prices?"

I would view the current weakness as a healthy valuation reset rather than definitive proof the AI supercycle has ended. However, I would be selective. Buying quality names after meaningful corrections is generally more attractive than chasing stocks that have already appreciated several hundred percent.