Micron $MU, Sandisk $SNDK and other memory manufacturers are again at new highs.
Micron has gained 62 % year-to-date, Sandisk is up 203 %...
Sure, AI is unstoppable and, thanks to massive CapEx investments by the biggest companies and the never-ending demand, which this week was again confirmed by $NVDA CEO Jensen Huang himself, it looks like these companies will enjoy high margins for a long time.
But we mustn't forget that we're operating in a very cyclical market. Similar, sometimes even larger, rallies were seen in Micron $MU back in 2000 or 2018. A sobering correction always followed.
How do you view this segment of the market now? Are you buying? I personally don't want to jump on this speeding train anymore; if I already owned the shares, I would hold them, but from my perspective opening new positions seems rather risky.
Unfortunately I didn't manage to buy these stocks, so I'm holding other chip stocks.
Latest statement from the largest HBM supplier regarding capacity:
"So we need some time to build up more wafers, at least four to five years. The current shortage could continue until 2030, so we expect more than a 20% shortage of the wafers," Chey said.
https://www.reuters.com/world/asia-pacific/south-koreas-sk-group-chairman-expects-chip-wafer-shortage-last-until-2030-eyes-2026-03-16/
I'm a beginner — I started at the end of January, so I'm still learning and I make mistakes now and then. I got into $MU and $SNDK; I like the current trend toward their products becoming essential, which I expect will continue. I'm watching them and would sell if necessary.
It’s possible and quite likely that the shares will continue to rise, but that valuation no longer makes sense.
No, I own $MU, and right now I’m more inclined to toy with the idea of a partial sell-off; it’s a bit stretched for my taste.