Wall Street Just Picked The Winners

Added: 2026-05-30

[00:00:00]Hey guys, welcome back. Today the memory sector decouple. It didn't just play out. It completely stole the show today in the market. If you look at the broader market action at today's close, you see that the S&P 500, it rose a modest.22%.

[00:00:15]The Dow Jones Industrial Average, it added a steady 7%. And the Nasdaq, it barely scraped ahead with a 02% overall.

[00:00:23]And to the casual observer, it looks like a standard quiet Friday. But in reality, beneath the surface of those muted indexes, we are seeing a massive capital rotation that is taking place in the market. The semiconductor rally is shifting from a generic rising tide into a hyper selective sorting mechanism. We are transitioning out of the early infrastructure phase where rising tides lifted every low margin uh uh company.

[00:00:49]And we're entering a phase where structural scarcity it dictates the astronomical valuations. The market is finally doing the math on multi-year contract certainty, and it's exposing a massive gap between companies that merely build commodity hardware and the true structural pillars of the AI era.

[00:01:08]Today, we need to unpack the raw trading action for the four core infrastructure plays that we follow on this channel.

[00:01:15]We're talking about Micron, SanDisk, Western Digital, and Seagate. We're going to separate the absolute tier one bottlenecks from the legacy hardware plays that are failing to capture the institutional capital right now. And then I'm going to give you my outlook as we head into the weekend, how we should play these stocks as we move towards Monday's opening bell. Guys, if you haven't done it already, make sure you hit like. Make sure you hit subscribe to the channel. I appreciate all of your support and how we're growing this community. Let's dive into the data. I want to show you an article that I saw today that got me excited for this sector. It was in the Wall Street Journal. So, let me pull it up and we can walk through it together. But you can clearly see as the header says that AI has made memory chips more valuable than oil. Micron, SAMD disk, SKH, or I like to call them the memory cartel.

[00:02:02]They're trillion dollar club. They are cheap despite their valuations if long-term contracts stabilize the sector. And if I scroll down here, you can see as the author said that memory is now worth more than oil. Staying that way though will depend on how much the notorious volatile industry can make recent changes stick. If you look at the three memory the three largest memory players Samsung, SKHix and Micron and this is the area that that was kind of shocking for me to to just think about and conceptualize that they now all carry a market cap of more than a trillion dollar each. That puts them 22% above the combined market cap of the world's three most valuable oil companies. Even with Saudi Aramco weighing in at at its own nearly 1.8 trillion and values have soared even further down the memory chain. Flash memory maker SanDisk has seen its market cap nearly triple since March. And it's now worth as much as ProChina, Asia's largest oil manufacturer. So look at the graph here. You can see outside of Saudia Ramco, you have Samsung, SKHix and Micron. All bigger than Exxon Mobile, Chevron, ProChina. This was pretty startling for me when I thought about it because you just think about oil companies having so much kind of value in the market and their valuations, their market capitalizations. The fact that the memory companies are moving beyond them now, it just shows you the demand in the market, how fundamentally strong these companies are, how much pricing power they have right now. The author went on to say too, and I like this point, that like oil, memory chips have seen they're widely seen as a commodity prone to violent price swings. But artificial intelligence is now driving demand for memory chips far beyond what existing suppliers can produce, which is driving up prices to previously unseen levels.

[00:03:55]Enough of those deals will recast the industry's business model in a way that will tame price volatility. Early signs of the effort is are good. Micron announced the signing of its first five-year supply agreement in its last earnings report in March, and the company said at that recent uh at the JP Morgan Tech conference that it is making meaningful progress on similar deals with other customers. So, we'll have to see what they announce at their next quarterly earnings in June 24th, I think it is. Are they going to announce more long-term deals have been been secured for their company? And in its own report, it says Sandis said five customers have signed long-term agreements with them. Enough to cover more than a third of the company's production capacity over the next fiscal year. So when I said when I saw this report come out from the Wall Street Journal Journal, it was a little bit staggering at first just because like I said, you think of oil companies being so valued in the market and so much market cap. I mean, I think we have to realize now how much fundamentally this memory sector has shifted. This is why we're seeing the rerated of the a rerating of these companies overall. We know that hyperscalers are spending hundreds of billions of dollars on AI data centers. And as the workloads aggressively pivot from the early model training to continuous AI agents interface, the industry is going to hit a wall and compute will be completely useless without the memory bandwidth.

[00:05:19]And this is also why we're seeing such pricing power from the memory cartel in the marketplace because the memory makers, they purposely withheld capacity extensions after the losses that they saw in 2023. That supply glut period and right now the constraints of the market are probably the tightest that we've ever seen. The ultimate game changer though is how these companies are weaponizing their leverage. They are completely destroying the legacy spot pricing model by forcing tech platforms into these massive multi-year supply contracts and hyperscalers are actively trading away their pricing power simply to get for guarantees to have physical silicon to deploy over the next three to five years. Future earnings for memory companies now they are no longer volatile. They're not speculative bets.

[00:06:06]They are locked in reoccurring revenue streams. This is the pricing the the visibility that we see with these companies that is driving up valuations.

[00:06:14]It's driving up price targets from analysts and it's driving performance in the market. So, let's jump over and take a look and just to show you what the memory titans did today in the market.

[00:06:23]Let's start with Micron. And like I said, let me pull that up first. You can see Micron had another strong day today.

[00:06:30]It was up $48 on the market, a 5% gain overall. The stock grew by 18% this week, 18.2. So today it just kind of continued to put on absolute clinic on it gained over 5% closed at about 972 as I mentioned it hit a new 52- week high of 981 you can see to the right the massive catalyst today for Micron it's the sweeping kind of valuation the rerating that we're seeing and one in particular by Susuana let me pull down and show you that to to you so it wasn't just Susuana though but this was the catalyst because we saw Susuana move their price target from 600 to7 1750 representing an 80% upside from where the stock trades today. We also saw DA Davidson which we know has been a big bull on the street for Micron. They're the first one to put a $1,000 price target out there. They shifted their target to 1,500 almost a 55% increase from where the stock trades today. Mazou put an 1150 price target out earlier this week and Barclays followed up on an 1175. All significant jumps over their prior targets and all representing significant upside from where the stock is trading today. So that was the major catalyst today for Micron. It was a big move and the Suscuana like their price target checks it. They're they're moving that way because of the average selling price for DRAM. It is completely outstripping what we're seeing in the market. It's completely outstripping the consensus models. Micron is operating in an absolute bottleneck right now and they can can currently fulfill only a fraction of their HBM demand. Their revenue trajectory is reflecting that reality and the price targets now reflecting reflecting that reality as well. But SanDisk also had a great day today and they also were driven by a clear catalyst in the market. Let me pull that up. You can see SanDisk up by over $53 over 3% today. Closed at just under $16.95.

[00:08:26]If you look to the right, you can see the intraday high. Got up over 1,700.

[00:08:31]So, this was a massive day for them.

[00:08:33]They've had a great week as well. They were up almost 11% this week, about 10 and a half% on the week. So, it was great to see Sandis kind of we knew they were coiled and ready to jump and we had a great week overall for this stock. I think it's also driven by a new price target. Susuana again, they've been very they've been very uh friendly to the memory players today. But you can see Susuana in the top line there. They moved their price target from 2,000 to 3250, representing a 92% upside from where the stock trades today. Mazou upgraded their price target from 1625 to 1825 earlier this week. We also saw Barlays move their almost double their target from 1,200 to 2,300 representing a significant upside in the market as well. All of this is anchored the core story here for for SanDisk and what it's anchored on are the multi-year supply agreements that they have locked in with the with the uh locked in with the hyperscalers to secure their brands.

[00:09:31]SanDisk had locked it's like 42 billion in revenue right now making it one of the most insulated fundamentally protected growth plays in the entire semiconductor space. But there was a bit of an immediate divide within the Fab 4 today because we saw the pure players like Micron and and SanDisk trade really well. The advanced memory providers kind of the the high valued memory plays with DRAM, HBM and uh and SSD and nan they traded completely different from the cold storage or the the hard dis hard disk drive players today with Western Digital and Seagate. So if we jump overall, you can see that Western Digital was essentially flat today. They were kind of at a just a flat 6, I think a six cents down, excuse me, 0.01, and Seagate was a very similar overall. You can see Seagate was a 0.92. They're down by, excuse me, by 92 cents, a 0.1. After hours pulling back by about another 80 cents overall. The clean clear takeaway here for me is if you look at the scorecard for both, and both Seagate and Western Digital tell us the same thing.

[00:10:39]The technical analysis is a strong buy.

[00:10:41]The analyst sentiment is a buy. But if you look at the fair value, there just haven't been rerated to the rate that we're seeing with Micron and we're seeing with Sandisk. We're still seeing significant kind of negative upsides for both Seagate and Western Digital. Here you can see SEAT is down by it's like a 29% negative upside, meaning that they're fair. They're trading way above their fair price in the market. We also drop down. You can see here they're trading way above the average analyst price. Not way above, but about 6% above. But Western Digital, if we jump over, similar story, trading above the fair price, trading above the the analyst sentiment, the average price target. So, we're just not seeing these two uh companies, the hard disk drives, the storage kings being rerated at the same pace that we are seeing with Micron and SanDisk in the market right now. I think that's causing a little bit of a decoupling, a little bit of a separation within the memory class itself. We have to keep our eye on this moving forward because in my opinion, I still think there's a tremendous runway for these companies, but we're seeing capital rotate into Micron into SanDisk at a significantly different rate today. I think part of it is just how it's being valued. If you look at this pyramid here, the AI memory hierarchy, you can clearly see as it lays out just kind of how they're valuing the types of memory.

[00:11:58]HBM SRAM is at the highest. DRAM is next. You have enterprise SSD kind of flash right there in the middle, nan right there in the third is the context memory and at the bottom is the cold storage of the HTTP providers. This is kind of what we're seeing right now in the market. You just have this kind of tier one, tier two and tier three plays o overall and we clearly see that Micron and SanDisk, they're breaking out to record highs right now. We're seeing kind of the capital rotate to them.

[00:12:26]We're seeing Western Digital and Seagate just kind of completely stalling today a little bit. They've had huge runs, but today capital just didn't rotate to them at the same rate that we saw with the others. And I believe it just comes down to that AI storage pyramid that I showed you. At the absolute peak of that pyramid, the tier one and the tier two that we saw are high-speed silicon. So, this is Micron's HBM. It's SanDisk's ultra dense enterprise SSDs. And when an AI agent runs an active interface model, it relies on lightning fast KV cache offloading to keep the GPM GPU from stalling. the active data has to move instantly into the silicon memory. These aren't commodity components. They are highly specialized performance assets protected by long-term uh corporate contracts carrying massive operating margins. Conversely, if you look at Western Digital and Seagate right now, they live primarily in that tier three, that bulk cold storage area. Mechanical hard disk drives are great for archiving legacy data, but they completely lack the physics required for real-time AI workloads and the uh uh mechanical platters that that the drives overall are limited by physical spin speeds and their asset heavy manufacturing means they cannot easily scale their margins when when silicon demand spikes. The market isn't making a mistake here.

[00:13:46]capital is intentionally it's rotating away from the legacy mechanical uh infrastructure and concentrating where the computational furut actually lives in today's market first micron and sand disk these need to be our core one our core tier one and tier 2 holdings today's price target increases that we saw from Susuana and others and the fact that they hit 52- week highs validate the thesis that multi-year contract certainty and phys physical silicon scarcity are winning the day in the market right now. Hold your core positions with these two assets and look to add on any macro pullbacks that we see in the market. Western Digital and Seagate are showing signs of clear technical pause because of their they are structurally tied to the lower margin of mechanical storage rather than the active silicon memory. They are lagging behind the comp lagging behind this computational wave. The tactical move right now is to trim these positions on temporary strength and concentrate that capital into the pure play silicon bottlenecks where institutional order flow is heavy right now. We are separating the noise from the signal every day on this channel.

[00:14:53]Make sure that you hit the subscribe button. Make sure you turn on the notifications and drop a comment below.

[00:14:59]Let me know exactly what you took away from today's market. What did you see differently? How did you see the memory sector operate overall? What were your key takeaways? What are you looking forward to as we move into the trading action next week? But guys, I hope you enjoyed the video. I look forward to you seeing the next one.