MU — expert X mentions

Apple has price gouged its own customers on MEMORY chip upgrades for decades. Apple's hypocrisy knows no bounds. WSJ: "Apple is crying foul, arguing that Micron’s gross profit margins, now surpassing 80%, are evidence of price gouging." "Apple and other customers squeezed suppliers during past downturns, sowing the seeds for current shortages, memory executives say."

$INTC and $AMD to sign CPU LTAs with Chinese customers for AI DCs (Reuters). - Prices of some CPU products have risen more than 40% in China since the start of the year from sources. - Month-on-month increases topping 10% for some products CPUs were already a bottleneck, following CPU ratios due to AI inference... But the broader trend of LTAs seems to be appearing from: - Memory, with $MU, Samsung, $SNDK, and SK Hynix signing DRAM/NAND LTAs. - Photonics, with $LITE, $COHR signing EML LTAs. And recent Trendforce reports that $AMD and hyperscalers are now pursuing CW LTAs. And I'm sure there's many more from MLCCs to all the way to substrates. +1 for the bottleneck investors... hard to be a "bubble that pops" if you have take or pay demand spanning multiple years.

Just some notes from $TSLA transcripts: Elon Musk: "I think Optimus will be the biggest product ever" from Q2 earnings transcripts. Even from Q1, Elon Stated: "I think Optimus will be our biggest product. Not just Tesla's biggest product ever, but probably the biggest product ever. And I remain convinced of that conclusion". It's very rare to see such high conviction reiterated from Elon regarding humanoids both directionally and TAM-wise. In terms of upstream suppliers opportunities, Karn Budhiraj, VP of $TSLA supply chains stated: "We’re seeing the same level of investment going to memory and also new specific items like metal injection molded parts, flexible printed circuits, and all sorts of nonlinear technologies..." And that they had to build new supply chains from scratch. So would be interesting to look at for new supply chain supplier opportunities apart from the known ones. Just pulled older slides and it looks like capacity targets for Fremont are 1M and Giga Texas was 10M, so at scale, $TSLA seems to be the clear US leader. If you're looking at that S-Curve opportunity ramp. On a side note, Elon also gave a shoutout to $MU with likely reasonably priced LTAs, given his statement: "We really appreciate Micron making room for Tesla in the years to come and giving us actually a very significant allocation on reasonable terms given the pretty insane pricing of memory these days." (Just for structural memory demand). Elon also gave a shoutout to Panasonic which had invested many billions in increasing battery cell production (will need to do deeper DD into Panasonic after this), then Samsung and $TSM. Just takeaways from Tesla earnings TLDR: Elon tends to be directionally correct on where the future is heading, such as with EV or Space. He seems extremely bullish on humanoids.

Reminder: most neoclouds are still down 15-30% in the last month. But don't forget what has happened in that short amount of time. - Meta upsized its Louisiana data center from $10B to over $50B, with the full site cost reportedly topping $250B with chips. Then doubled its compute target to 14GW by 2027. - Kimi K3, the hottest model in the world right now, literally paused new subscriptions because there isn't enough compute to serve customers. Rationing demand. In 2026. - OpenAI raised its infrastructure spending plan today to $750 billion through 2030, up from $600B, and broke ground on its first self-built data center, a $20B project in Georgia with 3.2GW of contracted power. - Reflection AI stacked roughly $7B in compute deals across SpaceX and Nebius in under a month because no single provider could supply them. - Nvidia disclosed a 9.3% stake in Nebius. The company with perfect visibility into every order book on earth bought a tenth of a neocloud. - SK Hynix's CEO said memory is sold out beyond 2030. Micron committed $250B to US fabs. Morgan Stanley raised hyperscaler capex to $1.4 trillion by 2028. Every single data point says the same thing, there is not enough compute, and the biggest players on earth are paying anything to get more of it. And the companies whose entire business is renting out compute are 20-30% off their highs. The disconnect is the opportunity.

A TON OF THINGS HAPPENED IN THE STOCK MARKET TODAY. Here's a full recap: 1. Rocket Lab $RKLB won a $266M U.S. Air Force contract, extending its momentum in defense. The launches are expected to take place in Alaska and be completed by the end of 2028. The award adds to Rocket Lab’s growing streak of defense contract wins as the company continues expanding its role in national security space missions. 2. BofA is staying bullish on the memory trade, arguing that Chinese open-source AI models strengthen the long-term demand case for $MU, $SKHY, $SNDK, $STX, and $WDC. The firm reiterated its Buy rating on Micron $MU with a $1,550 price target, saying cheaper Chinese model pricing does not mean lower hardware intensity. BofA notes Kimi K3 API pricing is reportedly 5x–350x below Western models, but says that reflects business-model choices rather than the true cost of compute infrastructure. The firm also highlights that Kimi K3 needs roughly 1.4TB of HBM per serving instance, while larger AI models should require the same or even more memory as weights and active parameters grow. BofA also sees CXMT focused on commodity DRAM rather than advanced HBM, and notes Micron’s CHIPS Act restrictions may expire around December 2026, potentially opening the door for $50B–$60B in annual buybacks. 3. Moonshot AI is reportedly targeting a valuation of up to $50B in a final pre-IPO funding round after launching Kimi K3. The company is expected to close its current round at a $31.5B valuation before starting another round of fundraising talks in August, ahead of a potential Hong Kong IPO that could come as soon as this year. 4. Tesla $TSLA detailed its 2026 Summer software update, with rollout expected soon. The biggest change is deeper Grok integration, letting drivers use voice commands to place calls, control music, change climate settings, and open the glovebox. Tesla is also bringing self-driving stats into the mobile app, making them viewable and shareable, while navigation will get smarter by surfacing routine destinations and favoring routes the driver has taken before. The update also adds the ability to set a preferred arrival battery level from the app, upload custom vehicle wraps without a USB drive, and lock rear-screen controls from the front display. 5. Nvidia $NVDA says it could eventually produce up to 1,000 Vera Rubin racks per day. If reached, that scale would imply more than $630B in quarterly revenue for Nvidia and its manufacturing partners, based on estimates cited in the post. Nvidia’s hardware engineering SVP Andrew Bell said the company’s manufacturing partners should be able to make up to 1,000 racks per day once production ramps, highlighting the massive revenue potential tied to Vera Rubin if AI data center demand continues scaling. 6. Sam Altman is expected to brief the Trump administration and members of Congress next week on OpenAI’s next family of models, including their capabilities and potential impact on jobs. A new release may be getting closer, though OpenAI has not officially named the models GPT-6 or announced a launch date. 7. Jefferies came away impressed after testing Meta’s $META AI glasses, highlighting the camera quality, seamless setup, and normal-glasses form factor. The firm says Meta has a first-mover advantage as the only player currently shipping AI glasses at scale. Jefferies estimates the category could become a $14B–$18B hardware revenue opportunity within the next few years, assuming Apple Watch-like adoption at an average selling price of $400, or roughly 35M–45M units. The firm also sees upside from AI subscriptions, advertising, and commerce over time. Jefferies noted Meta AI now has around 1B monthly active users, daily glasses users are tripling YoY, and more than 7M units were sold in 2025. Jefferies says the bigger opportunity is commerce, as AI glasses could capture user intent at the point of discovery if agentic AI shifts behavior from browsing to delegation. units in 2026. 8. Supermicro $SMCI gave a major preliminary update after hours. Fiscal Q4 revenue is expected to land near the low end of its $11B–$12.5B guidance range, but the bigger surprise is gross margin, now expected at 15%–17% versus the prior 8.2%–8.4% forecast. Last quarter, SMCI was guiding gross margins around 8.4%–8.7%, and its TTM gross margin is only 8.83%, making this a dramatic improvement in just 90 days. The company also said it received more than $60B in new orders during the quarter, pushing backlog to a record high, though some orders could still be delayed or canceled. Full results are due August 11 9. Google $GOOGL is rolling out Gemini 3.6 Flash, Gemini 3.5 Flash-Lite, and a new limited-access cybersecurity-focused model. Gemini 3.6 Flash is designed to be more efficient, using up to 17% fewer tokens while also lowering cost per token. Flash-Lite is aimed at faster, high-volume use cases where speed and scale matter most. Google is also introducing Gemini 3.5 Flash Cyber, a model built to find and help fix software vulnerabilities, though access will initially be restricted to governments and trusted partners. 10. The top 10 most active options today by contracts traded were $NVDA with 2.3M contracts, $AAPL with 1.1M contracts, $MU with 977K contracts, $TSLA with 887K contracts, $SPCX with 752K contracts, $INTC with 656K contracts, $AMZN with 511K contracts, $NFLX with 509K contracts, $AMD with 410K contracts, and $MSFT with 387K contracts. 11. CoreWeave $CRWV says near-term profitability is being weighed down by a timing mismatch in its AI infrastructure rollout. New capacity starts depreciating roughly six weeks before contracted customer revenue begins coming in, creating pressure on reported earnings. The company is carrying about $30B of debt to fund 49 operating data centers and future deployments, with depreciation and interest equal to 81% of Q1 revenue. CEO Michael Intrator expects that drag to lessen as more installed capacity converts into revenue. CoreWeave’s financing is supported by long-term customer contracts, where clients must pay for reserved capacity whether they use it or not. 12. Short interest across U.S. equities is climbing to extreme levels. In the S&P 500, short interest has risen to roughly 3.7% of free float, near the highest level in data going back to 2010. For the Russell 3000, short interest is around 6.1%, also close to an all-time high, with both measures steadily moving higher since the start of 2025. Across all NYSE-listed stocks, short interest reached a record 9.0% of shares outstanding in late June. For context, that same metric peaked near 5.0% during the 2008 Financial Crisis and around 6.0% during the 2020 pandemic. WALL STREET IS THE GREATEST SHOW ON EARTH.

The greatest fool in $MU seems to be $MU buying back its stock at the peak of the cycle. When will people learn that Semis are cyclical and go through boom and bust cycles? They look cheapest at the peak of the cycle when things are going the best. The AI super cycle will be no different.

A TON OF THINGS HAPPENED IN THE STOCK MARKET TODAY. Here's a full recap: 1. Google $GOOGL is developing a new AI chip that could run Gemini models 6x to 10x more efficiently than its latest TPUs, per The Information. The chip, internally called “Frozen v2,” would bake parts of Gemini’s architecture directly into silicon, reducing data movement and simplifying inference decisions. Google is targeting deployment as early as 2028 to help ease its AI compute shortage, though the design would trade flexibility for major gains in speed and power efficiency. 2. Microsoft $MSFT is expanding its partnership with AMD $AMD and will deploy AMD’s Helios rack-scale systems on Azure for frontier AI inference. The platform combines MI455X GPUs, Venice CPUs, Pensando networking, and ROCm software, with shipments to Microsoft beginning in the second half of 2026. Azure will also add new AMD-powered virtual machines for agentic AI, data pipelines, and semiconductor design, marking a broader adoption of AMD’s full AI infrastructure stack. 3. AUM in U.S. leveraged semiconductor ETFs has fallen $63B from the June peak to $100B, the lowest level since late April. That marks a 39% decline, the largest drawdown since April 2025, when assets more than halved from their August high. The semiconductor unwind accounts for 63% of the broader $100B drop in AUM across all U.S. leveraged ETFs over the same period. The selloff follows a massive ramp, with assets in these funds nearly tripling between late March and the June peak. Even after the pullback, leveraged semiconductor ETF assets are still up 400% from January 2023 levels. 4. Archer $ACHR and Anduril unveiled Thunder, an autonomous attack VTOL aircraft, with first flight planned for 2027. The runway-independent hybrid-electric aircraft is designed to operate autonomously alongside crewed attack and assault aircraft. The dual-use platform features tiltrotors and modular payloads for both defense and commercial missions. Full-scale surrogate flights have already been completed, and Archer plans to announce its first commercial customers later this week. 5. Chinese AI models are taking record share among U.S. firms on OpenRouter. The proportion of tokens used by American companies running through Chinese models has climbed to roughly 58%, a record high. OpenRouter lets developers access and compare models from multiple providers, making it a useful real-world signal of AI model adoption. Chinese model usage has tripled since mid-January, overtaking U.S. peers on the platform for the first time in March and briefly hitting 63% in early July. At the start of 2025, Chinese models were under 10% of usage, while U.S. models were around 80%. DeepSeek has become the most popular choice among American firms in recent months. 6. The top 10 most active options today by contracts traded were $NVDA with 3.1M contracts, $TSLA with 2.4M contracts, $AAPL with 1.8M contracts, $MU with 951K contracts, $MSFT with 884K contracts, $AMZN with 691K contracts, $INTC with 640K contracts, $SPCX with 606K contracts, $AMD with 506K contracts, and $GOOGL with 492K contracts. 7. BofA reiterated its Buy rating on CoreWeave $CRWV with a $140 price target. Analyst Tal Liani raised FY26 capex estimates to $34B from $29B, saying capex remains a key indicator of buildout progress and hardware pricing. BofA expects Q2 operating margin of 2.4%, slightly below the Street at 2.8%, but sees margins improving through the rest of the year as active power drives revenue recognition. By Q4, BofA expects operating margin to reach 14.6%, up from 1.0% in Q1, showing strong operating leverage. The firm also pushed back on competition concerns from SpaceX and Meta, arguing AI compute demand still far exceeds supply, making access to capacity the real bottleneck rather than provider choice. 8. IREN $IREN raised its 2026 AI Cloud ARR target to over $4B, up from its prior target of $3.7B. The company announced new AI cloud contracts representing $2.8B in total contract value, with approximately 85% of the updated ARR target now under contract. Goldman Sachs estimates the newly announced contracts represent an additional roughly $1B in contracted revenue with an average term of around 3 years. IREN also said recent agreements include customer prepayments covering about 45% of GPU capex, with customer contracts having a weighted average term of approximately 4 years. 9. UBS says Micron $MU could repurchase more than 40% of its shares by the end of 2028. The firm expects Micron to generate over $40B in free cash flow through 2028, and once its buyback restriction expires on December 9, 2026, UBS says the company could potentially use that cash to buy back more than 40% of its shares at the current price. Morgan Stanley said that memory stocks are trading at attractive prices but their best risk to reward names in the semi space are $NVDA Nvidia and $AVGO Broadcom. 10. Bloom Energy $BE shares are trading lower after New Mexico regulators rejected permits for a gas pipeline planned to supply Oracle’s Project Jupiter data center for the second time. The decision could delay the campus, which is expected to use up to 2.5GW of Bloom Energy’s gas-powered fuel cells. Energy Transfer may now pursue an alternative pipeline route. 11. Intel $INTC plans additional layoffs in its data center group as part of a broader effort to become a more focused and efficient company, CNBC reports. Intel said the unit is realigning roles and skills for long-term success, though the number of affected employees was not disclosed. 12. Trump signed three proclamations under Section 338 of the Tariff Act of 1930 imposing additional 50% tariffs on certain Canadian goods in response to what the White House calls Canada’s discriminatory treatment of U.S. products. The tariffs cover different categories of Canadian imports, including products ranging from wine to hockey sticks to cement, and apply even if goods originate under USMCA. Exemptions include energy, potash, goods already subject to Section 232 tariffs, fish, critical minerals, and certain other products. The tariffs take effect 30 days after signing. WALL STREET IS THE GREATST SHOW ON EARTH,

If I had to bet on the future, I'd bet on these 5 sectors. One name each. Interconnect - $CRDO Every generation of AI compute needs more links between chips, and it doesn't matter whose silicon wins. Copper king today, just bought their optical future with DustPhotonics. The wiring gets paid in every scenario. Neoclouds - $NBIS Compute is the scarcest resource on earth right now. Models are literally rationing customers. Nebius has $46B+ in contracts from Meta, Microsoft, and Reflection, growing revenue 684%, and just went asset-light to scale on other people's capital. Memory - $MU Three companies supply the entire world, and the SK Hynix CEO says it's sold out beyond 2030. Customers are prepaying years in advance. Micron is committing $250B to US fabs because they can see the demand curve. Oligopoly plus shortage is the best setup in markets. Semis- $INTC Someone has to physically make the chips on American soil, and there's exactly one US company that can. Every reshoring dollar, every national security mandate, every hyperscaler wanting domestic supply flows through the same place. Compute empires - $META Half of humanity on their apps, an ad machine printing $160B+ a year funding it all, 14GW of compute by 2027, their own chip in production, and an AI cloud business the market prices at zero. The future needs all of them.

Mizuho Securities: CPUs & GPUs Market Forecasts & Growth > Shipment Growth: Industry server CPU shipments are forecasted to reach 35 million units in 2026 and grow to 50 million units by 2027, representing a 40% year-over-year increase. > Long-Term TAM: The long-term Total Addressable Market (TAM) estimate for 2030 has been raised to $170 billion (up from the previous $107 billion forecast), driven by higher CPU-to-GPU ratio assumptions for AI inference servers. > CPU-to-GPU Ratios: The CPU-to-GPU ratio on AI servers is accelerating and is expected to approach 1:1 by the end of 2027 or 2028. Supply Chain & Technical Bottlenecks > DRAM Constraints: A critical bottleneck exists in DDR5/LPDDR5 supply, with a projected fulfillment ratio of only 70% over the next 12–18 months. > Demand vs. Supply Gap: Based on current models, the 2027 demand for DDR5/LPDDR5X (over 300 billion 1Gb equivalents) significantly exceeds the projected supply (220–250 billion 1Gb equivalents). > Potential Risks: The shortage of key materials—DRAM, substrates, and passives—is expected to persist through 2027 and could pose downside risks to downstream server assemblers, potentially leading to lower server rack output. Key Player Insights (2027 Forecasts) > Nvidia: Expected to reach 5.0–6.0 million units for the Vera CPU, including 2.0–3.0 million units specifically for agentic AI stack racks. > Google: Axion CPU production is projected to increase more than 2x year-over-year, aligning with the growth trajectory of TPU units. > AMD: The N2 Venice CPU is forecasted to exceed 6.0 million units. GPUs/ASICs Market Growth Projections > Rapid Expansion: The total AI ASIC market is projected to grow from 4.1 million units in 2025 to 24.0 million units by 2028. > Volume Drivers: The growth is driven by substantial increases in deployment by major hyperscalers including Google, Amazon (Annapurna), Meta, Microsoft, and OpenAI. > External Demand: The market for external (non-Google) AI ASIC units is expected to surge from 0.6 million in 2025 to 7.2 million by 2028. Key Hyperscaler Activity > Google (TPU): Continues to be a dominant player, with total shipment units increasing from 2.5 million in 2025 to 7.1 million by 2028. > Anthropic: Significant ramp-up is forecasted for their "TPU Ironwood/Sunfish" chips, moving from 0.6 million units in 2026 to 6.2 million units by 2028. > Amazon/Annapurna: Shipments for the Trainium line are projected to double from 1.5 million in 2025 to 3.6 million by 2028. > Meta: Rapid scaling of MTIA chips is expected, growing from 0.1 million units in 2025 to 2.7 million units by 2028. Technical Trends > Advanced Packaging & Nodes: There is a heavy reliance on sophisticated packaging technologies like CoWoS-L and CoWoS-S, and advanced foundry nodes including N2, N3, N4, N5, and A16. > HBM Integration: Nearly all listed high-performance ASICs utilize High Bandwidth Memory (HBM), with a transition toward newer generations such as HBM3E and HBM4/4E to meet performance demands. > ASP Variance: Average Selling Prices (ASP) range significantly, from approximately $2,000 for entry-level models to as high as $40,000 for top-tier specialized chips like the TPUv10. $DRAM $EWY $MU $GOOGL $AMKR $TSM $ASE $NVDA $AMD $AVGO $MRVL $INTC $MSFT $META

"Even if the memory shortage persists throughout 2027, research firms, sell-side analysts, and other prominent industry observers broadly agree that the supply-demand imbalance will begin to ease in 2028." Yes, that is correct. I actually have an interview transcript (I cannot disclose due to sensitivity) where the senior employee of one semiconductor company in Taiwan states: "The supply and demand for DRAM will reach a balance in H2 2028 to stabilise the price." He explains it along the lines of: 2026: The current demand gap is hovering around 4% to 5%. Original 2025 projections of an 8% to 9% shortage proved exaggerated because major manufacturers like Samsung and SK Hynix successfully transitioned from 1b to 1c process technologies. This node upgrade boosted bit output and filled much of the anticipated shortfall. 2027: The supply gap is projected to shrink to under 3% by the second half of the year as Micron and Samsung ramp up entirely new production facilities. 2028: The market will face a minor 2% to 3% deficit in the first half of the year (H1) before finally achieving a complete supply-demand equilibrium in the second half (H2), driven by the massive volume of new capacity deployed between late 2027 and 2028. $MU $EWY $DRAM