$SNDK Successfully took down a short position in U.S. stocks
This morning I already had fans set up in advance to enter a short position. Up to now, it’s already three times the profit—securely locked in.
All thanks to AI cloud vendors going on a buying spree for SSDs, pushing flash memory prices and gross margins to historic highs. But the good times won’t last long.
Supply-side pressure is increasing. Samsung and SK Hynix are both pouring huge amounts of money into expanding production, and a lot of new capacity will gradually be released. After that, it’s easy for supply to outstrip demand, and flash prices will be dragged down like a snowball. Big manufacturers will compete on price, and SanDisk’s high gross margin won’t hold.
There are also concerns on the demand side. Cloud vendors won’t be able to keep spending unlimited money on hardware. Once AI capex slows down, server storage orders will shrink immediately. The revenue guidance for the next quarter in the latest earnings reports is already weaker than market expectations.
What the company is making now is money from the peak of the cycle. You can’t price it like a growth stock using peak-cycle profits.
The stock price has surged massively in the early period. The market has built up a large amount of profit-taking positions. As soon as the data slightly misses expectations, you’ll see a concentrated rush to exit.
In essence, it sells chip bulk commodities—not an AI leader with exclusive barriers. Once the cycle reverses, the downside room will be very large—this is the logic the short sellers are mainly betting on.
After the U.S. market opens, I’ll look for another opportunity to take fans in and enter a short position. If you’re interested, jump in fast!
This morning I already had fans set up in advance to enter a short position. Up to now, it’s already three times the profit—securely locked in.
All thanks to AI cloud vendors going on a buying spree for SSDs, pushing flash memory prices and gross margins to historic highs. But the good times won’t last long.
Supply-side pressure is increasing. Samsung and SK Hynix are both pouring huge amounts of money into expanding production, and a lot of new capacity will gradually be released. After that, it’s easy for supply to outstrip demand, and flash prices will be dragged down like a snowball. Big manufacturers will compete on price, and SanDisk’s high gross margin won’t hold.
There are also concerns on the demand side. Cloud vendors won’t be able to keep spending unlimited money on hardware. Once AI capex slows down, server storage orders will shrink immediately. The revenue guidance for the next quarter in the latest earnings reports is already weaker than market expectations.
What the company is making now is money from the peak of the cycle. You can’t price it like a growth stock using peak-cycle profits.
The stock price has surged massively in the early period. The market has built up a large amount of profit-taking positions. As soon as the data slightly misses expectations, you’ll see a concentrated rush to exit.
In essence, it sells chip bulk commodities—not an AI leader with exclusive barriers. Once the cycle reverses, the downside room will be very large—this is the logic the short sellers are mainly betting on.
After the U.S. market opens, I’ll look for another opportunity to take fans in and enter a short position. If you’re interested, jump in fast!
