Storage stocks at 3x P/E: the cure for itchy trading fingers
Morgan Stanley just put out a report: Samsung and SK Hynix are trading at forward P/Es of just 3–4x—cheap as produce marked down at the end of the day. Looking back at the history books, storage stocks peak before earnings do: four months early in 2008 and 2012, and eight months early in 2018. Asian storage stocks have climbed 9x since last September, while consensus EPS estimates have been revised up 432%. To justify current prices, DRAM contract prices would need to rise another 70% quarter over quarter.
In a cyclical stock, 3x P/E is the last cigarette—once it’s smoked, it’s time to pay the bill. When the new capacity comes online in the second half of 2027, all the profits people are counting until their hands cramp will have to be handed back to the production lines coming online later.
Those holding $FIL and $AR , what’s your cost basis? Drop a number in the comments and let’s see who’s still stuck halfway up the mountain, catching the wind.
$FIL
Morgan Stanley just put out a report: Samsung and SK Hynix are trading at forward P/Es of just 3–4x—cheap as produce marked down at the end of the day. Looking back at the history books, storage stocks peak before earnings do: four months early in 2008 and 2012, and eight months early in 2018. Asian storage stocks have climbed 9x since last September, while consensus EPS estimates have been revised up 432%. To justify current prices, DRAM contract prices would need to rise another 70% quarter over quarter.
In a cyclical stock, 3x P/E is the last cigarette—once it’s smoked, it’s time to pay the bill. When the new capacity comes online in the second half of 2027, all the profits people are counting until their hands cramp will have to be handed back to the production lines coming online later.
Those holding $FIL and $AR , what’s your cost basis? Drop a number in the comments and let’s see who’s still stuck halfway up the mountain, catching the wind.
$FIL