Steve

Tesla Investor

[Laurence Fox @LozzaFox]

When are we going to have had enough of being second class citizens in our own country?

[Rupert Lowe MP @RupertLowe10]

Restore Britain will abolish the entire asylum system.

Enough.

[M @nyse_min]

$MU CEO, 실질적으로:

"10년 이상 동안 $AAPL은 우리 칩을 $5에 사서 금속 상자 안에 붙여넣고, 소비자에게 $99 업그레이드 가격으로 팔면서 우리가 $7을 받으려는 시도를 비웃었어요.
이제 우리는 그들에게 $50을 청구하고 있는데, 그들은 돌아서서 고객들에게 $250 가격 인상을 했네요."

[Hamid @hamids]

Buy. Hold. Rant.

BUY.
In that order. When buying stocks, I think of it as buying a company - so I'm in the mindset of being an owner of a company that I would be proud to own, but also I'm buying it at a reasonable price, and the company is in an interesting market with lots of opportunity.

HOLD.
Then comes the hardest part: Holding. Being patient is by far the toughest part of investing for the long term. The market is a noisy place. Prices skyrocket one day only to crash the next, based on no news, unrelated news, made up news by pundits and everything in between. The real news is company financials and commentary which comes out quarterly, so it's sparse and requires lots of patience.

RANT.
That's why I love to Rant! In the absence of being able to do other things, and exercising patience, I get through it by ranting. Ranting on X mostly, but also, with the help of a colleague, @dustinalper, I have launched the @BuyHoldRant podcast where we also rant on camera.

If you enjoy my rants, consider subscribing on YouTube, Apple Podcasts or Spotify.

Oh, and my portfolio has been public for 4+ years now (link in bio) and it's 100% free. I do all my trades transparently. Every single trade for the past 4 years has been public.

[Hardik Shah @AIStockSavvy]

$MU | Barclays 𝐫𝐚𝐢𝐬𝐞𝐬 𝐏𝐓 on 𝐌𝐢𝐜𝐫𝐨𝐧 𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 to $𝟐𝟎𝟎𝟎 from $𝟏𝟏𝟕𝟓, maintains 𝐎𝐯𝐞𝐫𝐰𝐞𝐢𝐠𝐡𝐭

[Shay Boloor @StockSavvyShay]

$MU generated ~$365M in profit per day last quarter 🤯

[Sharron Davies HoL MBE @sharrond62]

We have ALL this data which gender clinics are refusing to provide, now we’re going to experiment on another vulnerable group of kids… you have got to ask why? This 👇🏼is how medical scandals and harm happens, right before so many people’s eyes!

[AJ Investment Research @alojoh]

This was causing yesterday's weakness in longer duration names as I warned about last weak.

US Core PCE came in at 4.4%!

Even though this takes out energy, oil price sits also in this metric since oil price has knock on effects on pretty much everything.

There is virtually no good or service in which you don't have some impact from oil price. A thought experiment you can run to confirm this claim is: imagine oil price dropped to $0.01 per barrel. Would that good or service you're thinking about increase, decrease, or remain unchanged in price?
The answer will be for virtually everything that prices would go down even prices at your hairdresser since the hairdresser's commute would become cheaper.
So bottom line, unlike Andreessen Horowitz and other highly overrated investors claimed, no, oil is still super important and is clearly the main driver of inflation.

Background of my critic: Andreessen Horowitz famously put out a slide in April when oil was at over $100 telling investors how oil prices wasn't important anymore. That was the dumbest thing I had seen all year at that point from a famous investor.

Side note: Marc Andreessen's strong performance is mostly explained by him launching his fund at the perfect time, right at the long term equity market bottom, right after the Great Financial Crisis. Every monkey who started a tech fund then would have delivered stellar performance since even Apple traded at 9x forward earnings at the time.

Pro tip: if you want to assess an investor's performance, always look at fund inception! If a fund was incepted during a market low, good performance is not impressive at all. Conversely, if a fund was incepted at a market high and still performed well, well, you found a true winner if that performance can be sustained for several years.

[amit @amitisinvesting]

Long post, but some thoughts on what happened in the market today…

Today was a particularly weird storm of price action because the logic going into the open was as follows:

- $MU crushed, saved the AI trade

- AI stocks should go higher due to MU proving its not cyclical, this should help the broader market get a lift

Instead, what we got right before the open…

- $AAPL announces massive price hikes and effectively uses MU earnings to be like, “See! It’s not us, but if memory gets 86% margins, then we have to raise prices!”

- This happens right after the hottest PCE in 3 years is reported, even with oil (the biggest proponent of inflation the past few months) still coming down

- Microsoft then joins the party and raises prices across all XBOX products, once again citing memory costs

Market then proceeds to take a nasty dip in every sector…except Memory.

I think what is happening here will be studied for a long time. The hyperscalers, the companies that are RESPONSIBLE for $MU and $SNDK being multibaggers, are getting destroyed because…well they can’t buy back stock, they can’t get FCF positive, and they don’t have memory’s pricing power.

In fact, this is what Melius Research came out today and said:

“Why bother owning a hyperscaler who can't buy back stock any time soon? Micron can start buying over $25B/quarter in stock during CY27. Memory will go down as THE BOTTLENECK of ALL BOTTLENECKS for this AI era. MU said that current conditions last after calendar 2027, basically guaranteeing buybacks of epic proportions, especially next calendar year.”

We are at the point where the sell-side is saying that owning the best companies in the world makes no sense when you can own the bottleneck of all bottlenecks.

Here’s the thing: I don’t know if Melius is actually wrong.

My gut tells me that 86% gross margins will not last forever, but as long as the hyperscalers are willing to pay, then the structural logic for market participants comes down to a simple question: why own the companies paying the capex over the companies benefiting from it?

The problem is obvious: if memory inflation continues to be intense, it will affect every part of the market. From automotive to datacenters to PCs. $NVDA gets to have a tax because it’s building very IP-heavy products. Will the market allow something like memory, that is not IP-heavy, to force consumers globally to pay significantly more for the products? Also, do the memory makers even care because as long as they control supply, they can control pricing?

I’d imagine the big tech companies either lower capex to stop paying the cost, keep paying the cost, or try to innovate. They likely won’t lower capex and will most likely continue paying the cost, so there probably are some elements of them trying to focus on innovating in this area…but if there won’t be any menaingful cutoff in capex, the memory story continues.

The market fell today because higher inflation means more of a chance for rate hikes. I mean, NVDA went below 200 as MU hit all time highs. NVDA’s suppliers are more valuable than NVDA’s biggest customers. As a result, it’s creating a type of AI-flation that basically led the market to sell off everything else.

Not sure how this plays out, retail continues to buy the dip and today’s red probably gets bought…especially as earnings continue to grow…but we are in a new paradigm for how this market gives a premium to a stock and if you have pricing power over a component that matters to build AI vs being a companies that actually uses AI, you get a premium.

[Hamid @hamids]

You can't get more bullish on $MU than Elon Musk's comment below. Pretty incredible!

And to put things in context, "higher production" is not coming online until 2027 and beyond...and who knows if that will be enough.

[InvestAnswers @Investanswers]

Micron just overtook Bitcoin in market cap. $MU > $BTC. 📈

[Gary Black @garyblack00]

The question for $MU coming into last night’s earnings was not how big the memory-chip boom is, but how long it can last. The correct answer appears to be: Longer than anyone originally thought.

Perhaps the most important number from last night’s report was 16 -- the number of long-term supply deals Micron has locked in, guaranteeing approximately $100 billion in revenue. That eases fears that the current sky-high prices and margins are unsustainable.

Micron said that once all the supply deals are executed, agreements with either fixed prices or price ceilings close to current levels are expected to represent around 40% of its revenue. Meanwhile, the contracts also come with price floors which the company says will enable gross margins "well above" its peak in any past cycle.

MU skeptics have long worried that the current memory chip shortage was causing memory chip prices to remain artificially elevated. Last night’s earnings commentary and conference call showed management’s conviction that this AI cycle is uniquely sustainable to keep memory chip prices high through at least 2030. If that’s true, at 9x 2027 Adj EPS of $135, $MU at its pre-mkt indication of $1,220 still looks cheap.

Source: Bloomberg

[AJ Investment Research @alojoh]

Fun fact: Micron generated last quarter nearly as much free cash flow as Tesla throughout its entire more than 20+ years existence. Both trade at $1.4T MCap.

[Elon Musk @elonmusk]

Tim Cook, who told The Wall Street Journal that the jump in costs was unlike anything he had seen “in any area in over 40 years.”

Biggest price jump in anything I’ve ever seen too. https://t.co/aypJGgssnN

[Squawk Box @SquawkCNBC]

BofA Securities’ Vivek Arya breaks down $MU earnings & explains why he raised his price target to $1550: https://t.co/jIQyhohBWs

[Hamid @hamids]

Huh. 🤔 Turns out analysts are finally seeing the light on $MU:

[Sharron Davies HoL MBE @sharrond62]

Humiliated NHS trust pays out after huge trans row | UK | News | https://t.co/3zDA2kG2v6. 800k in total spent to try & keep men in the womens changing rooms intimidating nurses. Money that should have been spent on patients. Heads should roll https://t.co/gv7TaqKUbn

[Stephanie Link @Stephanie_Link]

$MU - not an AI bubble with 14/16 strategic customer agreements in $100B contracted revenues w/ $22B in cash deposits to secure capacity. Positive for the "food chain" or 5 layer cake - DC, Grid, Power cos.

[Steve @see44h]

Micron - They Just Changed The Memory Trade! https://t.co/ilY1AGzd3S via @YouTube

[Hamid @hamids]

$MU's beat this quarter, and raise of guidance for next quarter is absolutely mind blowing! 🤯