Memory boom meets stressed consumers — back the AI chipmakers, fade the premium
Thesis
Micron just locked in massive AI demand with revenue quadrupling, creating a $100B memory boom that is directly benefiting the AI supply chain. However, this same boom is squeezing the buyers of those chips: Apple just had its worst session in a year as it was forced to raise prices on Macs and iPads to offset rising memory costs, and Microsoft is facing a historic June rout over heavy capital spending. This combination suggests the profit power in the tech ecosystem has shifted to the component suppliers. We want to own the companies enabling the AI buildout (like Micron and TSM) rather than the end-product companies struggling with cost inflation.
Strategy approach
Build a pairs trade strategy on the daily timeframe. Enter long MU and short an equal dollar amount of AAPL when MU makes a 20-day high while AAPL drops 2% or more on the same day. Hold for 21 days with a 7% max stop loss on the spread.