I don’t get it. What is so different for RAM compared to GPUs to justify such a gap in multiples? I get that the technology is less complex but I don’t see commoditization coming soon. The technology is just starting into a new era, where RAM in the range of >250gb will be a standard. Alone the consumer market is huge for that. The technology for the whole product and manufacturing process needs to be designed, which leaves great potential for margins. This is not the moment where a product will commoditized and becomes cheap it’s exactly the opposite in my opinion. Can someone explain why the market has been so defensive? despite the recent kick off it’s still far behind the valuation of GPU producers.
How can the market accepts such a low forward P/E for MU?
byu/Remote-Juice2527 instocks
Posted by Remote-Juice2527
3 Comments
Because memory is cyclical in a way that GPUs kinda aren’t. At some point, most likely in 9 months or so, there will suddenly be way more available supply and these stocks will come crashing back to earth. a way more extreme version of previous memory supply cycles like 2018 and 2022. The hyperscalers can only spend their entire free cash flow on capex for so long. Few quarters at most before the market is like “wtf is this, I bought this stock because you’re supposed to be profitable” and then the party for MU/SNDK etc will naturally have to end.
What are you talking about? MU has gone parabolic and doubled since last month.
Memory always had over production causing cycles of demand and high inventory, until only recently where theyve begun being bottlenecked due to such strong demand that years of supply is booked.
You cant just force the market accept the current trend until they prove they can escape the memory cycle, if they can maintain margins and demand for 2-3 years, post this question again