Memory cycle to outlast market expectations
The bull case for memory manufacturers argues that physical supply constraints will prolong the current high-pricing cycle for two to four years, far longer than the six to nine months the market is currently discounting.
The argument
The guest argued that equipment suppliers are physically capped at 30% to 35% annual shipment growth, and cautious memory executives have underbuilt cleanroom space. Consequently, memory stocks trading at 6 to 7 times 2026 earnings are fundamentally mispriced for an imminent downturn that cannot physically materialize.
The thesis, stress-tested
✓ What validates it
- ✓Memory contract prices remaining flat or rising over the next two quarters
- ✓Equipment manufacturers reporting order backlogs extending past 12 months
▸ Risks discussed
- ▸A sudden demand-side collapse in data center spend
- ▸Unexpectedly rapid capacity additions bypassing equipment bottlenecks
Hear it yourself
"So the actual impact is already felt as we speak, and it's fairly meaningful to to extend that gets transitioned from the early adopters, the technology companies that are really adopting it because they kind of eat their own stuff that they're selling, to the rest of the economy to be seen. Right? We shall see how the whole thing evolves, but immediate impacts today. And in terms of the going forward, I would agree with that there will be many debates. There will be many ups and downs. This is not a situation that everybody has agreed on."
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