DRAM Hype appear to be the Next Bubble, Even Though the Bull Case Is Real. The trade is becoming crowded. Growth and Margins Unsustainable.

Not financial advice.
The bullish case for DRAM/memory stocks is strong: AI demand is huge, HBM is supply-constrained, and companies like Micron, SK hynix, and Samsung are performing well.

The market seems to be treating today’s shortage as if it will become a permanent new normal. Maybe it will. But memory has historically been one of the most cyclical parts of semiconductors. When pricing is tight, margins explode. When supply catches up or demand pauses, margins can fall brutally fast.

My bearish view is not “DRAM companies are bad.” They are not. My view is that the stocks may be extrapolating peak conditions too far into the future.

Also, record margins are probably not normal margins.

Micron’s results showed massive revenue growth and very high gross margin guidance. SK hynix also reported operating margin ~72%. Those numbers are incredible, but it would not be fair to assume peak margins are permanent.

The trade is becoming crowded.

I’m not saying “short DRAM.” I’m saying I would be very careful buying if it was near its cyclical peak. Low P/E ratio is not always same as Cheap.