Memory chips are the AI bottleneck — buy suppliers while device makers bleed
Thesis
Connecting the news of Micron's massive, AI-driven revenue beat (Yahoo Finance) with the story of Apple raising consumer prices to cope with memory costs (CNBC) exposes a massive shift in bargaining power. Memory chip makers are now calling the shots, forcing big buyers to pay up or face delays. Furthermore, with the Fed's hands tied by sticky inflation (CNBC), interest rates are likely to stay high, favoring companies with immediate, inelastic demand—like data centers building AI infrastructure—over consumer electronics makers that rely on discretionary spending. Buying the suppliers with the leverage (MU, WDC) allows you to front-run this trend.
Strategy approach
Build a rule-based strategy that enters long MU and WDC on D1 when MU holds above its 50-day moving average and AAPL drops below its 50-day moving average. Use a 30-day max hold and a 6% trailing stop.