AI memory costs are crushing gadget makers — bet on the chip suppliers over the brands
Micron just proved that the demand for AI memory chips is skyrocketing, but the companies that *buy* those chips — like Apple and Microsoft — are seeing their stocks fall because those essential components are getting too expensive. This is a classic 'pick-and-shovel' moment where the supplier is poised to outperform the end-product maker.
Idea
There is a stark divergence forming inside the tech sector based on the recent news. On one hand, Micron reported a blowout quarter with revenue quadrupling, effectively locking in massive AI demand and sending memory suppliers soaring. On the other hand, end-user hardware giants like Apple are getting slammed in the market because they are forced to raise consumer prices to cover those exact, skyrocketing memory costs. Even Microsoft is suffering a historic stock rout as investors panic over their heavy spending. While a general tech sell-off dragged Micron down briefly, the underlying fundamentals suggest the component suppliers hold the pricing power here, making a trade that bets on suppliers outperforming the hardware brands highly attractive.
What happened since
| Symbol | Dir | T+1 | T+5 | T+20 |
|---|---|---|---|---|
| AAPL | LONG | +0.00% ✗ | +3.74% ✓ | — |
Price change since publication · updated Jul 12
Key details
Community
News sources
- Microsoft’s stock is suffering a historic June rout as investors balk at heavy spending — MarketWatch
- Apple stock gets slammed on bigger Mac, iPad price hikes. Why it can weather the storm — CNBC
- Micron Soars 17%, SanDisk Jumps 15%, Western Digital Climbs 13% After Blowout Quarter Locks In $100B of AI Memory Demand — Yahoo Finance
- Stock Market Today: Nasdaq Slides Amid Global Technology Sell-Off; Micron, Nvidia, Sandisk Fall (Live Coverage) — Investor's Business Daily