Warning: Memory Stocks May Have Peaked
Morgan Stanley’s latest report names Samsung and SK Hynix, whose forward P/E ratios are just 3 to 4 times. Asian memory stocks have risen about 9-fold since their rally began in September 2025, while consensus EPS estimates have been revised up by an average of 432%. Low P/E ratios are a classic trap near peak earnings for cyclical stocks. Historically, memory stocks have peaked 4 to 8 months before earnings reached their highs.
To support current share prices, DRAM contract prices would need to rise another 70% quarter over quarter—a tall order. Supply is expected to gradually come online in the second half of 2027. Storage accounts for 29% of an NVIDIA NVL72 rack, but that share falls to 19% when expanded to an 8-rack interconnected system, while networking equipment rises from 10% to 20%.
My position is clear: I’m not chasing this trade now. Decentralized storage will pull back along with AI sentiment, so adding at these high levels doesn’t make sense.
For those holding decentralized storage, what’s your cost basis? If it breaks below the previous low, will you average down or cut your losses?
$FIL $AR $BTC
Morgan Stanley’s latest report names Samsung and SK Hynix, whose forward P/E ratios are just 3 to 4 times. Asian memory stocks have risen about 9-fold since their rally began in September 2025, while consensus EPS estimates have been revised up by an average of 432%. Low P/E ratios are a classic trap near peak earnings for cyclical stocks. Historically, memory stocks have peaked 4 to 8 months before earnings reached their highs.
To support current share prices, DRAM contract prices would need to rise another 70% quarter over quarter—a tall order. Supply is expected to gradually come online in the second half of 2027. Storage accounts for 29% of an NVIDIA NVL72 rack, but that share falls to 19% when expanded to an 8-rack interconnected system, while networking equipment rises from 10% to 20%.
My position is clear: I’m not chasing this trade now. Decentralized storage will pull back along with AI sentiment, so adding at these high levels doesn’t make sense.
For those holding decentralized storage, what’s your cost basis? If it breaks below the previous low, will you average down or cut your losses?
$FIL $AR $BTC