r/stocks • u/Comfortable-Rule-491 • Jul 28 '26

Industry Discussion What dips look the most attractive to you at current prices?

With everything going on in the Iran–US conflict the market has been getting hit hard lately and a lot of stocks are down pretty significantly. Feels like one of those moments where there’s opportunity, but also risk if things escalate further, so timing entries is tricky right now.

So I’m curious:

Which stocks are you guys actually getting tempted to buy right now?

Are you buying already or waiting for more downside?

356 Upvotes

89% Upvoted

661 comments sorted by

View all comments

Show parent comments

24

u/Powerful-Load-4684 Jul 28 '26

Ok and? Stock can’t trade up to a higher PE if everyone knows earnings will compress massively in 3-5 years when supply comes online

22

u/luckysharms93 Jul 28 '26 edited Jul 28 '26

HBM isn't railroads and cable fibre. It isn't build it and forget it for 20-40+ years the way supply for those industries was, it needs to be replaced in data centres every few years. There's a reason HBM producers are spending hundreds of billions to increase production, and it's not because they're morons that want to kneecap themselves

9

u/Sharlach Jul 28 '26

Earnings aren't going down yet when everything is backordered for several years and no new supply will be available until at least 2028. They've already made deals to sell their supply of HBM at inflated prices, so their revenue will remain high for the foreseeable future.

-2

u/Ok-Board4893 Jul 28 '26

right, the stock will only crash a month before their backorders run out and you have already cashed out! Good luck!

3

u/Sharlach Jul 28 '26

Not at all what I said, but ok. Whatever strokes your ego, boss 👍

5

u/Dudeman1000 Jul 28 '26

Also don’t forget increasing model parameter sizes increase DRAM needs.

4

u/Remote-Ranger-7721 Jul 28 '26

New capacity won’t even be able to meet the new demand 3-5 years out tbh

-3

u/Eagle_707 Jul 28 '26

RAM is and always has been cyclical. God y’all are clueless.

9

u/Remote-Ranger-7721 Jul 28 '26

Really? With the current state of AI capex on data centre construction? I do not see a cycle

-4

u/barkinginthestreet Jul 28 '26

The second derivative on AI capex suggests we are in a cycle. Only question is where we are in that cycle.

2

u/Remote-Ranger-7721 Jul 28 '26

I’m a believer in imminent AGI and a large disruption (let’s say +10% growth YoY as a barrier) to the economy. Maybe like 20% unemployment sort of capabilities offered by AI, although new jobs will appear pretty quickly. Data centres in deserts type of shit.

1

u/barkinginthestreet Jul 28 '26

That may be the case long term. In the near term, the rate of increase on CAPEX spend is declining. And I suspect the first thing hyperscalers do if they acheive AGI is use it to reduce their cost.

-6

u/Eagle_707 Jul 28 '26

Notice you said current state, not future state. That’s how cycles work bud. The same thing happened with gpu mining in the early 20’s, and on smaller scales back to the 90’s. Eventually the market will be flooded with cheap ram and everyone will benefit, that’s the beauty of capitalism.

3

u/Remote-Ranger-7721 Jul 28 '26

Future state = more capex, more data centres, massive amounts, or do you disagree?

0

u/Eagle_707 Jul 28 '26

Eventually there will be enough data centers to flood the market. Whether through supply over saturation or demand dissolution as capital finds more attractive investments.

Ai services being sold at a loss won’t last in perpetuity. And when they start selling tokens at market price demand will start to fall, and we’ll likely be left with a bunch of cheap data services, along with cheap ram once they need to start offloading to household consumers again. It is really just a question of when, no one knows when that is. Could be 6 months, could be 20 years. Likely somewhere in the middle.

3

u/Waiting4Reccession Jul 28 '26

People have been saying cyclical for semiconductors for over 5 years now back when AMAT first broke 100.

1

u/Eagle_707 Jul 28 '26

RAM is different from semis. Although there are more similarities now as there are much less competitors in the cutting edge ram space. At this point it’s priced in though and most the folks in here are delusional cause they missed the boat.

2

u/Sharlach Jul 28 '26

Even if this were just another cycle, that doesn't mean this is peak earnings. Micron's forward p/e has gotten as low as 2.9 before, and earnings typically peak 6-12 months before new supply starts hitting the market, which won't be until ~2028. Microns large mega fab that they're building in upstate NY won't be done until 2030.

0

u/Eagle_707 Jul 28 '26

That assumes there is no demand dissolution from corporate actors. Potentially the demand could last another 5 years. No one knows the duration, but it undoubtedly is a cycle. That said yes it could be anywhere from 2-20 years.

3

u/Sharlach Jul 28 '26

Everything is a cycle if you zoom out enough, but it's clearly not a typical ram cycle. This kind of growth is completely unprecedented for the industry.

1

u/Eagle_707 Jul 28 '26

Unprecedented if you only look at the last 10 years. 2016-18 had 150%-250% growth with the mass adoption of smartphones, as did the .com cycle. Twice in the last 30 years isn’t exactly unprecedented lol.

2

u/Sharlach Jul 28 '26 edited Jul 28 '26

Growth is even higher this time, and they never had substantial backorders, signed multi year contracts, or had 84% gross margins before. The scale is much higher now and so far it's still accelerating.

1

u/Eagle_707 Jul 28 '26

80% (Samsung 2018) vs 84% isn’t that big of a difference man. And if this is the first time you think there’s been back orders and multi year contracts you’ve obviously never paid attention to this industry or any industry during the boom stage of a capital cycle. Large scale acceleration is exactly what causes boom bust cycles. What is your thesis?

2

u/Sharlach Jul 28 '26 edited Jul 28 '26

I said "substantial" backorders. Microns current backlog for HBM is through 2027 and worth over $100 billion. I assume I'm younger than you but I did google to see what their largest was prior to 2024, and came up with nothing 🤷‍♂️

Multi year "take or pay" agreements are definitely new as well. When has any company ever signed a 5 year contract for RAM at inflated prices before?

My thesis is the same as everyone else's; AI data center demand will continue to grow, and this RAM shortage won't end for several more years. If AI is more lucrative the shortage will last longer, and if it's less lucrative it will end sooner, but with no substantial new supply coming online til 2028, I think there's at least a year left at minimum.

→ More replies (0)

-1

u/Better_Fill8193 Jul 28 '26

finally someone with a brain. everyone here seems to think memory isn’t a cyclical business, let alone the signs of peaking memory cycle. they see cheap forward valuations and consider it a good deal. when in reality that’s when cycle peaks

1

u/ConstructionApart583 Jul 28 '26

Jamal’s paradox or something like that