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Hey guys, welcome back. Just got to New York and I'm excited to drop this video because we had a another outstanding day in the sector today. Micron was on absolute fire today. So was Sandis, so was Western Digital, and so was Seagate. Micron was up over 5%. Guys, if you look over the last week, we're seeing Micron up over 18%.
SanDisk is up over 24%. Western Digital an 11% gain and Seagate 17% gain over the last week. But we are also at a crossroads right now because every time we find ourselves in this sector of just sustained performance, we feel like we hit a speed bump and today was no different. We saw our favorite bearish viewpoint resurface again.
We've talked about Michael Bur a lot on this channel and the fact that he is shorting Micron, shorting the memory sector and he has been very quiet. Well, today he's not quiet anymore. He's actually announced that he is increasing his short positions on Micron. He is taking a stance against the memory sector.
So, I feel like as a memory investor, you probably feel the same way is every time we have momentum and these stocks are on fire, we hit a little bit of a road bump. And today is no different. we find ourselves at this juxtaposition of are we truly at a permanent AI structural shift. Are we seeing AI just create a new super cycle for this sector or are we entering into a massive the top of a massive cyclical bull trap?
That's the what the the worry is on all of us memory investors. Quite honestly me I believe we are in the shift. I think we are in a super cycle that everything in the demand is pointing that way. But we have to respect the bare thesis and I want to go through what actually Michael Bur said today and why he's increasing his short position not only on Micron but just betting against the memory sector as well and I want to go through a new position that Rosenlat put on SanDisk today.
They put a new price target. They re they reiterated a buy and they dropped a high price target on the street today. a 36% upside from where we see SanDisk trading today. So, let's go through all of those stories. Let's make sure we cover it all today and talk about what's the most relevant stories across the memory sectors and get us ready to see to to to anticipate what we could see at the opening bell tomorrow.
But if you guys haven't done it yet, make sure you hit like, make sure you subscribe to the channel, and let's start off by just doing a kind of a round the horn of taking a look at all five of the of the Fab Five in the US. How do they perform today? Because, as I mentioned, we are on fire right now with the memory sector, and it feels really good.
I hope you feel the same way. All right, let's get started. First, let's take a look at the candle pattern chart from Micron. You can see this is just an absolute sign of conviction. We actually did gap down though, right out of the get-go. If you remember, we ended yesterday at about 1043 and right at the opening we went down to 1032 got as low as as a,030 a share but it actually rallied right back.
We saw support. If you take a look at the volume underneath in the first hour, two hours of trading it was very strong volume today and you can see the conviction that rallied the stock right back up. We saw buyers and kind of institutional buyers, retail buyers stepping in to show support for Micron.
It drove it back up in the first five minutes to close just above where we closed yesterday. And then we saw continuing conviction that took it all the way up to close at about 1081. The stock hit a high of of 1083 at that moment. Had a tiny bit of digestion and just strong conviction throughout the day where we drove all the way to where we finished today at about 1093 a share.
And if you look underneath the RSI is a little high. It's about 65 but that is doesn't surprise me with the level of conviction that we saw today for Micron. Look, this was a absolute strong sign today. A great sign for the stock. Just that momentum we saw from midm morning all the way through the close was just a just a strong sign of conviction.
I'll say it again. And we closed near the intraday high for the stock. If I jump over here, I can show you that it closed at 109631. $52 on the day 5%. You can see the intraday high was 1097. So we closed just above the intraday high. Great sign for the stock and the after hours were down by about.7 right now.
A little over $7 coming back. Doesn't surprise me after the massive moves that we saw. We probably will see a little bit of profit taking but I do think that this stock is continued to p it's continued and it's poised to to run as we head towards its uh earnings which is in seven days. said earnings will drop on the street next week.
It is going to be a massive catalyst for the stock and I think we'll continue to see a lot of conviction and a lot of support and kind of upward trend upward momentum for Micron as we head towards their uh earnings on September 30th. If we jump over to SanDisk, SanDisk had another strong day and remember I said yesterday that I wasn't worried about them decoupling at all because of all the signs that we see in the market.
We had that strong report that came out that talked about the North American cloud service providers and just the demand that they have for enterprise SSDs and the fact of the shift that we have going to Agentic AI, how that was just going to be a strong signal of demand for SanDisk and they they flipped right back today.
They gained $120 a share up just under 7%. In the after hours, we're seeing a minimal give back right now about $4.50, 50 cents. But you can see on the intraday high over here, and I'm circling it, got up over $1,900 a share. Can we continue to push? Will Micron, excuse me, will Sandis break the $2,000 barrier again?
I know many of us probably didn't believe that was possible. There's been a lot of doubters in the commentary in the comment sections on this channel regarding Micron and SanDisk, but we're seeing strong conviction right now, strong support. That should make you feel really good about this stock. And I'm going to show you at the back end of this video just what Rosenlat had to say.
Why this is no longer your father's SanDisk is what the name of that article was. So make sure you hang on and you stay to the end and you can hear those insights as well from Rosenlat. If I go over to Western Digital, Western Digital is up over three and a half% today. Just gained about 16.5 dollars on the stock.
Closed at 464. After hours, we're seeing a similar trend right now. The last time I looked, I think Seagate was the only one that differentiated, but we could see on the right here, it got up to 474. And then finally, Seagate. Seagate right now, let me refresh that. Seagate is up. It was up almost just over 4 and a.5% 4.85% today.
$42.52 for the stock. It's closing at about 920. And if you look on the far right for the intraday high here, it got up to about 937 a share today. the after hours. This is the one right now. Well, there he goes. It flipped into the red as I'm speaking. So, all of them right now are pulling back a little bit.
We'll keep our eye on it as we move through the night and we'll certainly keep our eye on it in the pre-market tomorrow morning as we race toward the opening bell. But guys, let's be realistic. This has been an outstanding week. We look at Friday, Monday, today. It's been a strong three-day stretch for these me for this memory sector and all of these stocks.
And if I scroll down just to show you what SKH Highix the ADR did. It was up today as well. I think it was up close to 190 per ADR. Excuse me. Let me get to it over here. All right. And you can see right here I'm circling it. Actually closed at 19540 today. Was up over $6.54. So all FAB all five of the Fab Five had strong performance across the board.
But what did Michael Bur actually say? So here's his and you may have seen it. He put it in his sub his substack as well. But here is his sentiment across the board is that he is adding to his position for Micron, for ne Nebus, for Palanteer U and he's flagging what the CEO of Acer said regarding memory supply.
And if I scroll down into the article, I'll show you that exactly. So Michael Barry's his bearish memory stock thesis gained another data point on Tuesday after the Acer CEO Jason Chen warned that rising Chinese production could eventually ease supply constraints and and pressure prices. He mentioned it in his substack and you can see you can definitely find that.
There's not much more in that substack though that I'm going to show you. So I don't know if I would spend my time for but it is there if you wanted to view it. He's saying and Chen Chen had an interview and he's saying that memory inventories are building and that mainland Chinese suppliers are releasing more volume into the market challenging forecast the current shortage could pers persist for years and we know according to Bur that the shortage in conventional memory was created in part of manufacturers shifting towards high bandwidth memory.
It's we've talked about it's the it's the wafer penalty. it needs more wafers to create high uh HBM versus just traditional uh RAM and commodity DRAMM products. So that shift is what Bur is saying is what's caused the shortage. Uh and it's been kind of an artificial shortage overall as we shift towards HPM.
But now normal RAM production is ramping back he says and that's going to you know solve the market. we're going to see more supply in the market earlier than than most analysts or most of the manufacturers expected. And this is kind of graphic is what he is essentially explaining. If you kind of take a look at the top, you see that hyperscalers divert capacity to HBM.
So that's the wafer penalty that we've wafer penalty that we have talked about. And then you see the ordinary DRAM it develops artificial shortages. Well, his argument now is the Chinese suppliers fill that conventional uh DRAM void. It's all going to allow the market inventory to rebuild and ultimately the pricing will peak overall.
And this is Bur's kind of main argument. And I think where we need to separate his thesis from the physical memory market is and what it's telling us today is is the the factual piece that I want to talk about because Bur is he's increasing his short exposure to Micron as it mentioned in the beginning.
He's effectively telling the market today that the extraordinary memory economics will begin to normalize as supply catch catches up with demand in the market. and he may ultimately be right about that aspect of the cycle. But there's three main indicators that I consistently look at and that that I watch to monitor this cycle.
And I can tell you that all three of them in my opinion tell us that we are not at that point anytime and right now at that point at all because conventional DRAMM contract pricing it remains incredibly strong right now. extremely strong and the spot market prices they're showing a little tendency to cool but they are definitely nowhere near a definitive collapse in pricing.
So I think that spread between contract and spot pricing continues to stay strong and CXMT they are rapidly increasing production and and their technological capab uh capabilities. But we do not have any any evidence that Chinese DRAM is flooding the global supply chain and to eliminate the shortages that we see.
In fact we know that CXMT is producing or what they're producing kind of older commodity DRAM. It could help some of the shortages that we see in the Chinese market for PCs and for consumer products, but is not going to help the shortages that we see for the hyperscalers, the data centers and the advanced memory products.
So, I'm not seeing that supply from CXMT reach, you know, flood outside or leak outside of China at this point and have any impact on the on the kind of supply and the global supply chain overall. And then the last thing I would look at is the original equipment makers. It is true they are building or protecting inventory and we saw that from Dell and as well as HP in recent reports but I think that is more of a sign is they're concerned about their ability to obtain supply.
So that's it's not that they are that they're destocking or they have too much inventory on hand. They actually are building up their inventory because they remain concerned about the future memory availability in my opinion. So, I'm not concerned about those signs and I'm not seeing a kind of overall uh flooding of the market or the market inventory rebuilding to a point where it actually will collapse the pricing.
So, I think Bur overall he may be identifying the mechanisms that will eventually end this cycle when we get to that point. But the physical data that I see in the market and that I just covered right now, they confirm they don't confirm the timing of his thesis at all. I actually think the timing is incredibly off.
So for micron investors that distinction is very critical. Good. Because being right about how a cycle eventually ends is very different from being right about when it end. But guys, I don't think we're anywhere near that point in the cycle right now. And every piece that I look at from a physical demand side or just the the kind of the the pricing and the physical the physical supply side in the market is not showing anything near that.
So, the fact that Micron absorbed Mic uh Michael Bur's announcement today when we go back and take a look at what we're seeing in that candle chart, the fact that the market and the Micron stock price just absolutely absorbed that and we closed near the intraday high for the stock, it tells you the sentiment of Wall Street.
It also tells you that the market absorbed the headline without validating the bare case, at least for today. So, I still feel very strong about Micron. I feel very strong about SanDisk and the other members of the Fab Five in this memory sector. But it is interesting every time that we get strong momentum, we see Michael Bur put his head out again and start to create headlines about him, you know, uh, increasing his short position and how he feels that the memory sector is just overextended.
So, let's jump to the second piece I wanted to talk about. First, we saw a number of different articles today for SanDisk. Just take a look at the you see Sandis shares are up 644% this year. Surprise, there's a lot more upside. And this is based on the Rosen Black kind of coverage. They just initiated new coverage for the stock.
You can see the the headline of the article, not your father's SanDisk. So Rosenlot, it starts its coverage as a buy and they actually dropped a price target of $2,400 on the stock today. It's a 36% upside from where the stock trades today. Their analyst Kevin Cassidy, he initiated the coverage uh as a buy, as I mentioned, with a price target of $2,400 and it's implying a 36% upside from where we closed the stock today.
And the reason is if you go through it, it's all related to the shift into the AI inference. So as he said that the new um new AI compute platforms are creating an opportunity to reposition NAND from a commodity storage medium to a more system critical component of AI infrastructure expanding as expanding model sizes and data inensive inference prioritize density, performance, endurance and supply certainty over the lowest price.
And he goes further on to talk about their Bix 8 and their Bix 10 uh kind of roadmap and those platforms and how he said they are to they will improve density with fewer 3D layers than some rivals which he said should sustain a cost and performance advantage in the AI oriented enterprise storage and on that basis Kevin Cassidy is con conservatively estimated a fiscal 2030 non-GAAP earnings of about $300 a share for SanDisk His $2,400 price target is based on a 10 times is based on 10 times his fiscal 2028 earnings estimate, a multiple that he called conservative given the growth outlook and while reflecting the executional risk and the chance NAN reverts to a cyclical commodity like pricing.
So we're seeing just kind of strong sentiment across the memory sector today, this week, over the last week in general. And I think this sets up a key debate for us as investors. I mentioned it at the beginning. Are we truly at the beginning of a shift of a, you know, the AI super cycle shift or are we setting ourselves up to to at the top of a massive cyclical bull trap?
I mentioned I think we're at the shift. I think it's clear based on the demand that we see in the market, the shift to inference, what we're seeing across our compute players, our memory players, the picks and the shovels that we are at the beginning of a shift into the next phase of this super cycle or this giga cycle we may want to call.
I think for SanDisk, we're seeing it as well. I think the core debate for investors right now based on everything we're seeing is is SanDisk an artificially inflated cyclical stock which is due for a brutal pullback or are we witnessing a market that is permanently ready to rerate NAND from a low margin commodity into a structural AI infrastructure player or a more important player overall I think when you think about SanDisk and the reality that twothirds of their production uh is sold out for four years to the hyperscalers for the next four years.
This historical commodity model and that viewpoint in my opinion it breaks down guys. So to close tonight's video a couple things I wanted to focus on is one if we just go back and we think about the strength that we have seen over the last the last week in trading for these stocks it has been phenomenal.
Now, Michael Bur's thesis that is coming out against those pricing numbers, it is in direct kind of conflict to what Wall Street's sentiment is right now. So, Micron's upcoming quarterly earnings next week will tell us a ton if we push th those margins to 87% as we see Goldman Sachs as they're predicting the Chinese DRAM numbers and the and the threat of those dumping.
It isn't going to affect the high-end balance sheets for Micron yet. we're not going to see any impact at all. But let me know what your thoughts are below. Do you think who do you think's on the right side of the trade? Do you think it's Michael Bur? Do you think do you agree with him that we are getting ready in to hit this inventory peak?
Or do you think Wall Street is right with the price action that we've seen in the memory stocks right now that the infrastructure has permanently altered the memory cycle and we are ready to start into a new shift or shift into the next phase of this super cycle. Overall guys, let me know your thoughts. I hope you enjoyed the video and I'll see you on the next
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