Getting absolutely crushed! Storage chips lost a trillion dollars in a week—is the bubble bursting, or is this a panic-driven sell-off?
U.S. semiconductor stocks have fallen for seven straight days over the past two weeks, their longest losing streak since 2015. SanDisk and Micron are down around 20% over the same period, and semiconductor stocks have plunged across the board. There’s a lot of fear right now, and many people say it looks like the dot-com bubble of 2000. I think it’s due to the following:
1. Interest rates: September CPI came in at 3.7%, higher than expected. The 10-year Treasury yield briefly surged to 5.3%, and markets started betting on rate hikes again. High-valuation growth stocks are the first to take a hit.
2. Where will the money for AI come from? OpenAI’s annualized revenue is reportedly around $50 billion, compared with market expectations of nearly $70 billion. Cloud providers are pouring around 90% of their operating cash flow into capital expenditures and relying increasingly on debt. The market is starting to wonder whether they’ll ever recoup these investments at this rate.
3. Negative fundamentals for memory: ChangXin Memory Technologies says it plans to launch server memory with a new architecture by year-end. The market immediately jumped to concerns about “oversupply in 2028–2029.” Goldman Sachs, however, believes concerns about supply are reasonable, but the impact of the technology is being overestimated.
Have the fundamentals deteriorated? Not at this point. Contract prices for DRAM and NAND are still rising in the fourth quarter, and major customers have signed long-term contracts through 2031. But remember: memory stocks typically peak while product prices are still rising. The market isn’t selling off because of this quarter’s earnings—it’s worried about how many more years the good times can last.
These are the signals I’m watching next:
U.S. companies’ earnings reports at the end of October
Whether spot memory prices start to turn
Whether Treasury yields can stabilize#比特币短期持有者持仓升至408万枚 $SNDK
U.S. semiconductor stocks have fallen for seven straight days over the past two weeks, their longest losing streak since 2015. SanDisk and Micron are down around 20% over the same period, and semiconductor stocks have plunged across the board. There’s a lot of fear right now, and many people say it looks like the dot-com bubble of 2000. I think it’s due to the following:
1. Interest rates: September CPI came in at 3.7%, higher than expected. The 10-year Treasury yield briefly surged to 5.3%, and markets started betting on rate hikes again. High-valuation growth stocks are the first to take a hit.
2. Where will the money for AI come from? OpenAI’s annualized revenue is reportedly around $50 billion, compared with market expectations of nearly $70 billion. Cloud providers are pouring around 90% of their operating cash flow into capital expenditures and relying increasingly on debt. The market is starting to wonder whether they’ll ever recoup these investments at this rate.
3. Negative fundamentals for memory: ChangXin Memory Technologies says it plans to launch server memory with a new architecture by year-end. The market immediately jumped to concerns about “oversupply in 2028–2029.” Goldman Sachs, however, believes concerns about supply are reasonable, but the impact of the technology is being overestimated.
Have the fundamentals deteriorated? Not at this point. Contract prices for DRAM and NAND are still rising in the fourth quarter, and major customers have signed long-term contracts through 2031. But remember: memory stocks typically peak while product prices are still rising. The market isn’t selling off because of this quarter’s earnings—it’s worried about how many more years the good times can last.
These are the signals I’m watching next:
U.S. companies’ earnings reports at the end of October
Whether spot memory prices start to turn
Whether Treasury yields can stabilize#比特币短期持有者持仓升至408万枚 $SNDK