u/Glass-Record2446

As you all know I am invested in Micron and wider memory ETFs, but generally am always staying on the edge, trying to understand bear case as well and for me the key thing is when to sell.

The good news is that, Micron delivered $54.2B in quarterly revenue, up 379% YoY, and guided next-quarter revenue to $61.5B.

So the bull case is getting stronger:

🐊 HBM’s wafer requirements constrain industry supply growth.

🐊 10 additional Strategic Customer Agreements SCA improve demand visibility.

🐊 Management expects gross margins to rise again after Q1.

🐊 FY27 capex is now expected to exceed $50B, accelerating future capacity.

Rosenblatt raised its target to $1,900, valuing MU at 10x FY28 estimated earnings. But that’s an analyst scenario, not intrinsic value.

Here’s the tension I care about:

Their earnings power is extraordinary. But Micron is investing heavily to expand capacity, and competitors won’t stand still.

If customer commitments, AI demand and HBM complexity make this cycle structurally stronger, today’s earnings multiple could prove misleadingly low.

If supply catches up and margins normalise, today’s record profits could be a dangerous valuation anchor.

The question isn’t whether Micron can deliver FY28. It’s how much of today’s earnings power survives beyond it.

Not financial advice. Past performance does not guarantee future results.

I’ve talked about photonics quite a bit this year, and I have relatively high exposure to the space. So when $LITE, $COHR and $AAOI started moving sharply, I obviously paid attention.

But for me, the interesting part isn’t simply that the stocks are up.

It’s where the value could actually move through the supply chain.

🐊 The latest catalyst is policy, but it’s not a done deal.

Morgan Stanley’s Washington checks suggest the FCC is discussing restrictions on Chinese optical transceivers, potentially starting with 3.2T modules, with implementation potentially beginning as early as October.

The important detail is that this appears to be a policy discussion, not a final rule. The FCC’s September equipment-authorisation decision did not include optical transceivers, after earlier reports had raised concerns about possible restrictions.

There is also a separate bipartisan Senate bill targeting Chinese-made transceivers in sensitive federal national-security systems. That’s a procurement restriction, though not the same thing as a broad import ban.

🐊 But here’s the part I think the market needs to think about more carefully.

If the reported 65% US-content framework is how the FCC ultimately approaches 3.2T, the key question isn’t necessarily:

“Who replaces the Chinese transceiver makers?”

It could be:

“Who supplies the valuable components inside those Chinese transceivers?”

If the test is based on the value of components supplied by US companies rather than where the module is physically assembled, a Chinese module maker could potentially remain the assembler while sourcing more of the DSP and laser content from US suppliers.

That changes the thesis.

The opportunity may not be US transceiver manufacturing replacing China.

It may be US component suppliers capturing more of the economics underneath the module.

🐊 And that’s where I find the second-order effect more interesting.

Think DSPs. Lasers. TIAs. Drivers.

And separately, InP substrates.

But I would keep the InP thesis separate: InP may be a critical capacity bottleneck, but it doesn’t drive the 65% BOM calculation.

Morgan Stanley’s broader photonics work has also highlighted tight component capacity and the importance of InP supply.

🐊 The timing matters too.

Even if policy action comes as early as October, that doesn’t mean a 2026 revenue explosion.

The 3.2T ramp is still a future event.

So I don’t want to chase a headline simply because photonics stocks are moving.

For me, the real question is whether this policy becomes a catalyst for pricing power, qualification wins and incremental component content over the next few years.

That’s a much more interesting investment question than simply asking which stock is up today.

And it also changes how I look at $AAOI.

I wouldn’t call AAOI a straightforward policy beneficiary based solely on the 65% framework. I’d look at it more through its capacity, qualification and ability to win share.

The deeper thesis remains the same:

Don’t just look at the company making the final product. Look one layer underneath.

Because sometimes the biggest opportunity isn’t the company everyone is talking about.

It’s the supplier whose component everyone suddenly needs.

Not an investment advice.

Well, there was no pun intended, the name of ticker is actually $NICE, and $NICE is around $115–116, after a long de-rating driven largely by concerns that AI could disrupt its customer-experience software business.

Oppenheimer just upgraded NICE to Outperform with a $150 target. That’s roughly 30%+ above the current price. But one analyst’s target isn’t the thesis. The numbers are.

Q2 tells a mixed story.

🐊 Revenue was $782.3M, up 7.6% YoY, with cloud revenue growing 12.6%.

But profitability deteriorated:

🐊 GAAP operating margin: 13.3% vs. 22.1%

🐊Non-GAAP operating margin: 25.3% vs. 30.2%

🐊 GAAP EPS: $1.40 vs. $2.96

🐊 Non-GAAP EPS: $2.70 vs. $3.01

So even the “clean” earnings number fell about 10%.

And yet NICE guided to $11.06–$11.26 of FY26 non-GAAP EPS.

At ~$115, that’s roughly 10x forward adjusted earnings.

That looks cheap.

But here’s the catch:

The valuation assumes the earnings recover.

That’s why I think the more useful question isn’t:

“Is NICE cheap?”

It clearly looks inexpensive on the company’s FY26 adjusted EPS guidance.

The real question is:

Why did margins fall, and do those pressures normalize?

NICE is integrating Cognigy, the conversational/agentic AI platform it acquired, while also making targeted investments in its AI-native CXone platform. Management explicitly describes these as time-bound investments.

That creates a very interesting setup.

If these investments and integration costs roll off while cloud growth remains around the low-to-mid teens, the current earnings multiple could look unusually conservative.

But if revenue growth stays around 7–8% and margins fail to recover, the low multiple may be justified.

There is also evidence that AI isn’t simply cannibalising the business.

AI ARR grew 66% YoY in Q1 2026, and NICE said AI was included in 100% of CXone enterprise deals. By Q2, AI ARR had reached $362M, representing 15% of cloud revenue.

So my three checkpoints are becoming much more specific:

1. Cloud growth: Can NICE sustain 13–15% growth?

2. AI monetisation: Does AI ARR continue growing rapidly and translate into larger enterprise deals?

3. Margin recovery: Do operating expenses and integration-related investment normalise enough for earnings to recover?

That’s the entire NICE debate for me.

At ~$115, you’re not buying a clean growth story.

You’re buying a potential margin-normalisation story at a low forward multiple while waiting to see whether AI becomes an accelerator rather than a disruptor.

That’s much more interesting than simply saying “NICE is cheap.”

I have opened a very miniscule “foot in the door” position and keep studying more and updating.

Not financial advice.

🐊 Revenue: $54.23B vs. $51.07B est. 🟢
+379% YoY
🐊 Adj. EPS: $33.42 vs. $31.61 est. 🟢
🐊 Adj. Gross Margin: 87.0% vs. 86.1% est. 🟢

Q1 FY27 GUIDANCE
🐊 Revenue: $61.5B ± $1.5B vs. $57.02B est. 🟢
🐊 Adj. EPS: $38.15 ± $1.00 vs. $35.40 est. 🟢
🐊 Adj. Gross Margin: ~86.25% vs. 86.4% est. 🚩

CASH FLOW
🐊 Operating Cash Flow: $43.97B vs. $34.47B est. 🟢

BUSINESS UNIT REVENUE
🐊 Cloud Memory: $16.28B
🐊 Core Data Center: $18.00B
🐊 Mobile & Client: $13.11B
🐊 Automotive & Embedded: $6.82B

OTHER Q4 METRICS
🐊 Adj. Operating Income: $44.64B vs. $42.41B est. 🟢
🐊 Adj. Net Income: $38.40B vs. $36.31B est. 🟢
🐊 GAAP EPS: $32.87

KEY UPDATE
🐊 Quarterly dividend: $0.15/share
MANAGEMENT COMMENT
✅ “Micron delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027.”

Starting with Bonds
🐊 The 10-year Treasury yield just hit 5.21% its highest level since mid-2007.
🐊 The 30-year is running near 5.48%, the highest since 2004.
My fear is that when the long end moves further than the 10-year, it's usually a signal about long-term inflation and fiscal risk, not just a garden-variety rate move.
This is a bearish stretch for bonds, plainly. Yields up means prices down, and three things are pushing in the same direction at once:
🐊 oil spiking toward $107 on renewed US-Iran tensions (inflationary),
🐊 one-year inflation expectations at a stubborn 4.6%, and
🐊 markets now pricing roughly 70% odds of another Fed hike at the October 28 meeting,
🐊 on top of the Fed's first hike in three years back on September 16.
Layer on heavy Treasury issuance to fund the deficit, and you've got a genuine higher-for-longer, more-supply story not a one-headline blip.

Gold’s reaction
Gold's reaction is the more interesting tell. It's down nearly 4% in the same stretch during a geopolitical flare-up, when gold is supposed to catch a bid. I'd resist the temptation to read that as "capital rotating into Treasuries" that's a bigger claim than the data supports. The more defensible read: rising real and nominal yields increase the opportunity cost of holding a zero-yield asset, and that's currently outweighing gold's usual geopolitical risk premium.

Impact on AI stocks
Where this bites hardest is long-duration growth equities, AI names included but the mechanism matters. Higher yields raise the discount rate applied to future earnings, full stop; that's a valuation math problem, not a verdict on AI demand.
The real question for AI stocks isn't whether demand holds up it's whether earnings can grow fast enough to outrun both a higher discount rate and the enormous capital intensity required to produce those earnings. That's a different, harder question than "is the AI trade over."

What to prepare for:
Continued chop in rate-sensitive tech and semis until yields find a ceiling; oil and Iran headlines as the near-term catalyst to watch; gold not reliably doing its "safe haven" job while real yields stay elevated; and a bias toward short-duration fixed income, pricing-power businesses, and energy exposure over long-duration growth names still leaning on future earnings that haven't shown up yet.

Said the most poetic line in tech in their earnings call today
“demand will continue to outpace our production capacity through mid-2027.”

and the other one was

We delivered record revenue for our fifth consecutive quarter and achieved an important milestone as we returned to non-GAAP profitability in the quarter. Further, we saw a strong volume ramp of our 800G products, which more than doubled sequentially.

🔥🔥🔥

"We think the Vera Rubin architecture is the best architecture. We think it's the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia, So we're exclusive to Nvidia."

Elon Musk

$NVDA + $SPCX 🐂

The way I see the real story in Palantir's $PLTR Q2 print isn't just the beat …… it's the acceleration of US Commercial revenue surging 149% YoY to $764M, pushing the Rule of 40 score to a staggering 155%.

Every quarter this holds, the AI buildout debate shifts from “is demand real” to “can memory and photonics supply keep up.”

Q2 2026 Results

🐊Revenue: $1.94B vs $1.8B est ✅ (+93% YoY)

🐊Adj. EPS: $0.41 vs $0.35 est ✅

🐊Adj. Op Inc: $1.19B vs $1.06B est ✅

🐊US Commercial Revenue: $764M (+149% YoY)

Q3 2026 Guide

🐊Revenue: $2.160B–$2.164B vs $2B est ✅

🐊Adj. Op Inc: $1.29B–$1.30B vs $1.14B est ✅

FY26 Guide (Raised)

🐊Revenue: $8.15B–$8.16B vs $7.69B est ✅

🐊Adj. Op Inc: $4.89B–$4.90B vs $4.46B est ✅

Adj. FCF: $4.5B–$4.7B vs $4.27B est ✅

US Commercial Revenue: >$3.4B (134%+ YoY)

Revenue Breakdown

🐊US Revenue: $1.6B (+115% YoY)

🐊US Commercial: $764M (+149% YoY)

🐊US Government: $809M (+90% YoY)

Other Q2 Metrics

🐊Rule of 40: 155%

🐊TCV: $3.4B (+49% YoY)

🐊US Commercial TCV: $2.1B (+153% YoY)

🐊US Commercial RDV: $6.2B (+124% YoY)

On face of it The Fed held at 3.5-3.75% in a 9-3 vote, with Cleveland’s Hammack, Minneapolis’s Kashkari and Dallas’s Logan all pushing for a 25bp hike instead. Which comes not as a huge surprise, because markets were also expecting, 2/3 probability that rate will not be increased, but 1/3rd that it will be.

And the meeting today confirms, that market expectation was right, their is a wider crack in tactonic plates and fault lines are getting wider. As today’s FOMC decision was the most divided since September 2016, the first time three members dissented in the same direction since then.

Where are the fault lines?

The hawks cited inflation running above 2% for five-plus years, worsened by Middle East-driven energy prices BofA sees three hikes to 4.25-4.5% this year on that thesis. The majority held, judging conditions “unusually uncertain,” effectively taking the option value of waiting over risking a policy error in either direction.

One of most imp, thinf’s what is Warsh thinking? I dont know, but what is he saying, to some degree reflects, the thought process, Warsh’s framing matters more than the vote itself.

His statement stuck to “just the facts,” no guidance, reiterating there’s no soft inflation target, only 2%. He flagged that nominal and real yields are materially higher since the last meeting, and said markets are “learning to play the ball, not the referee.” On the dissents: “I asked for a good family fight, and I got one.” He also stressed the Fed has no tolerance for persistently elevated inflation and a resolute commitment to restoring price stability.

Market reaction:

🐊The curve steepened 2yr eased to 4.24%, 10yr rose to 4.66%, 30yr jumped to 5.19%.

🐊Equities sold off, Dow down ~1.6%, S&P/Nasdaq down ~0.6%. ( though there are other reasons behind it as well)

My expectation on how different Sectors would be impacted is as follows:

🐊Banks and financials benefit from higher-for-longer NIMs;

🐊energy stays supported by the geopolitical premium. Rate-sensitive growth, small caps, REITs and homebuilders face headwinds.

🐊Gold is the clearest loser here a stronger dollar and higher real yields point toward the 2026 low near a dovish pivot would flip that toward $4,100+.

I suspect that today we escaped the rate increase, which if it would have happened today, would have led to blood bath to an already fragile market, but escaping it again in next meeting, the probability would not be as high, at some point the boogeyman will come, and slaughter would happen, the chances are getting higher and higher… lets keep tracking the following;

🐊September’s SEP/dot plot,
🐊the Iran war oil trajectory,
🐊upcoming CPI/PCE prints, and
🐊whether more regional presidents join the hawkish bloc.

What do you think, what am I missing?

Not a financial advice, I can be wrong about it.

🐊revenue up 165% to $1.065bn,

🐊EPS of $0.78 versus $0.41 expected, and

🐊FY guidance lifted to $3.9-4.2bn from $3.4-3.8bn.

Shares surged near-double-digits after-hours despite two rough weeks fighting Hunterbrook’s scandium sourcing allegations and an 11% pre-earnings selloff.

But the line that matters more than the beat is Sridhar’s:

“customers are now placing longer-term orders leading to our backlog growing at a faster pace than revenue.”

Paired with his claim that all major US hyperscalers plus over a dozen neoclouds, AI labs and colocation operators have now validated Bloom’s power solutions, this isn’t an Oracle-Jupiter story anymore. It’s category validation. On-site fuel cell power just became infrastructure, not a hedge.

That’s the sector signal. Grid interconnection queues run 3-5 years in some regions, and hyperscalers building AI campuses can’t wait.

Another imp thing he said :

"Depending on whose reports you read, somewhere between 30 and 40 gigawatts of new AI data center capacity is going to be turned on in 2027."

Backlog:

Backlog outpacing revenue confirms customers are locking in years of forward capacity regardless of near-term scrutiny.

Financing

Brookfield’s late-June move to expand its Bloom financing facility from $5bn to $25bn is the capital backstop that made this scale possible, not a same-day reaction to it.

For me the most important thing is to read the tea leaves that that who else benefits:

🐊Brookfield (BAM/BEPC) on the project-finance side of every deployment.

🐊 GE Vernova, whose multi-year heavy-frame turbine backlog is the utility-scale overflow valve for demand Bloom’s months-to-deploy fuel cells can’t reach fast enough different order books, same power-bottleneck thesis.

🐊 Vistra and Constellation, behind-the-meter and merchant power names riding “power is the bottleneck, not chips.”

And

🐊 Eaton/Vertiv for the data center power layer that scales regardless of which generation tech wins.

- ASML fell as much as 6.5-7%,
- Applied Materials,Lam and KLA fell 5-7% in sympathy, and
- DRAM names followed: Micron off 5%, SK hynix’s ADR down roughly 9%, SanDisk down 12%.

So apparently, two headlines landed hours apart and torched a green tape.

- China’s CXMT went public on Shanghai’s STAR Market and popped roughly 470%, becoming the most valuable China-listed chipmaker. ( I covered it)

- Then a report thar a Shanghai company had begun mass-producing homegrown DUV lithography tools, something China has never done at commercial scale.

And hell broke loose!!

So what is the bear case exactly?

If China can build its own lithography tools, the export-control moat disappears. CXMT scales cheap DRAM, eventually graduates into HBM, and takes share right as the market prices Micron and SK hynix for a multi-year supercycle. Coherent story, on face of it.

But it’s thinner than the headline, on the memory side especially. The Shanghai firm, pulling engineers from Huawei-linked Yuliangsheng, targets five machines this year, twenty in 2027, for SMIC, Hua Hong and CXMT.

Critical parts still come from Japan, deliveries have slipped on supplier delays, and the tools trail ASML on performance and reliability, needing months of qualification first.

This isn’t EUV, it’s the older immersion-DUV generation ASML shipped two decades ago, useful for 28nm-and-up mature nodes. China’s EUV effort remains a lab prototype built from secondhand parts; forecasts anchored to ASML’s own development curve put commercial-scale 7nm DUV in China at the mid-2030s, EUV near 2040.

Let me be straight fwd, that equipment names selling off has a more legitimate multi-year logic than memory names doing the same. Even 28nm immersion DUV reaches 7nm via multipatterning, and 7nm is the node China needs for its own AI accelerators, so a working domestic tool is a real long-run TAM threat to ASML, Applied, Lam and KLA. Fair.

Worth noting the other side though: SMIC, Hua Hong and CXMT are the exact three names the pending MATCH Act would bar from buying or servicing ASML tools anyway, so some of that “lost” China revenue was heading out the door via policy regardless of whether the domestic tool works.

Today’s news shouldn’t have moved the needle as much as it did, even accounting for that.

Micron and SK hynix aren’t in the lithography business at all, and this story says nothing new about either.

The more useful document isn’t the DUV report, it’s CXMT’s own IPO prospectus, (I referred to this in my prev. note as well).

In its risk factors, CXMT discloses

- cost-per-bit over 30% above Samsung, SK hynix and Micron,
- inventory turnover of 1.44x against 2x-plus for the big three, and under 2% of wafer starts touching HBM.
- Modeled 8-high HBM3 yield sits near 25%, no dedicated HBM line in its use of proceeds, and its HBM3E volume target is 2027, roughly where incumbents were before HBM4 became the fight that matters.

Where CXMT is genuinely taking share is commodity DRAM and NAND, because the big three shifted capacity toward higher-margin HBM.

The real risk isn’t today’s headline, it’s CXMT’s fresh $8.6B war chest getting deployed as state-backed capacity that undercuts commodity pricing on purpose. Worth tracking, but the current evidence points the other way: CXMT has reportedly priced comparable 64GB DDR5 server modules above Samsung’s, and its inventory turnover is tight, signs of a capacity-constrained supplier riding the same shortage as everyone else, not one positioned to dump.

Gartner still sees combined DRAM/SSD pricing up roughly 130% this year, and that shortage is what’s underwriting Micron and SK hynix’s current earnings.

On valuation, Micron and SK hynix both show roughly single digit fwd p/e. But the fair challenge stands: cyclical memory names have historically traded cheapest right at the top of the cycle, because the market discounts the margin collapse it expects next.

A alow multiple and over reaction to news, here is what makes me confident as an investor in Micron and even for SK Hynix. I will continue holding my $MU position.

This is not a financial advice, dyor.

I have written about $SKM earlier as well, in April and a few times later, now they are pivoting to one of largest Hyperscalers in the region.

How Big is a 2-Gigawatt (2GW) Data Center?
For context, a standard company's data center uses about 10 to 50 megawatts of power. A giant tech campus uses 100 to 500 megawatts.

SK Telecom committing to 2GW puts them in the same league as Elon Musk's xAI (which is also 2GW) and the first phase of Meta's giant new facilities. SK Telecom eventually wants to scale up to 15GW by 2035 through a new subsidiary called SK Hyper. That is a scale only a few US tech giants can handle.

For South Korea, this is a national strategy to become a "Top 3" global AI power alongside the US and China. Instead of just making and exporting chips, they want to keep the heavy computing and AI work on their own soil.

So there were two larger deals

Samsung & Broadcom: They signed an agreement worth over $200 billion through 2030. Samsung will supply advanced memory chips (HBM4 and HBM4E) and manufacture Broadcom's AI chips at its Pyeongtaek factory.

NVIDIA & SK Group: They signed agreements for a massive partnership worth over $500 billion. SK Telecom is going to build huge AI data centers (up to 2 gigawatts) in South Korea, with the first phase going live in 2027. At the same time, SK hynix locked in a long-term deal to supply NVIDIA with next-generation memory chips.

Who Are Winners Here?

Samsung: They get a massive new customer (Broadcom) that isn't their main rival, TSMC. This proves to the world that their new chip-manufacturing technology is actually competitive.

NVIDIA: They guarantee a steady supply of rare memory chips for years to come.

SK hynix: They turn their massive backlog of orders into a guaranteed, multi-year business.

SK Telecom (SKM): This is the most interesting pivot. A phone and internet company is basically turning into a massive AI real estate landlord. That is a brand-new way to make money.

Micron $MU: Even though Micron isn't directly in these new agreements, they aren't left out. Samsung, SK hynix, and Micron control over 90% of the world's memory market, and all three are completely sold out through 2026. Because Samsung and SK hynix are so busy making specialty AI chips, all the normal, everyday memory chip orders will naturally flow to Micron. Plus, Micron already has its own ties to NVIDIA.

Am getting more and more bullish on my $SKM.

Not financial advice. I hold SKM, MU and Nvidia. This is not a recommendation to buy or sell anything. Do your own research.

For those memory and micron bears, this is what Elon Musk said during $TSLA earning call, about micron $MU

"Yeah. I'd actually also like to thank Micron for giving us memory allocation. They've got to make some very tough decisions on memory allocation. We really appreciate Micron making room for Tesla in the years to come and giving us actually a very significant allocation on reasonable terms given the pretty insane pricing of memory these days."

Not a financial advice.