Absolutely insane $SNDK guidance comments from earnings call. - "NAND market will exceed $300B in revenue in calendar year 2026, up 3x year over year." - "NAND market will approach $500B in revenue in calendar year 2027." - "Data center share of total revenue to expand from ~30% in 2025 to ~50% in 2026, and to continue outpacing the market in 2027." - "Demand from our customers is growing faster than our supply."

Recommended reading for the weekend: 1. Gavin Baker (@GavinSBaker) pinned post — Market is overreacting to hyperscale credit spreads widening 2. WSJ — His Wedding Guests Were Arriving - Just as His $45 Billion Fund Was Falling Apart 3. @FundaAI — SPCX: xAI 8GW Buildout Mapping 4. Vikram Sekar (@vikramskr) — The AI Trade Burned Down: Let Round 2 Begin (with more sanity this time...) 5. @damnang2 — After CXMT's Listing, Do the Memory Three Have Further to Fall? 6. @SemiAnalysis_ — Can AMD break the CUDA Moat? AMD Advancing AI 2026 Essential Reading: $AMZN / $MSFT / $META Earnings Transcripts

Compute compute compute. 1. OpenAI increase compute spend forecast through 2030, from $600B earlier this year to $700B. 2. $AMD and Anthropic have signed a multi-billion dollar deal, where "Anthropic will purchase up to 2 gigawatts of AMD’s latest-generation chips" and AMD will also invest up to $5B in Anthropic as certain deployment milestones are met. Today's an AI news day it seems!

Tough to say if semis have bottomed now. With most AI infra names having green days. - From $SIVE, $AEHR, and $IQE up over 20%. - To $SNDK, $MU and $AAOI up over 10%. Regardless of today's returns, the next couple of weeks will certainly be more important for more clarity: - 22 Jul: $GOOGL Q2: first proper gauge of the ~$750B hyperscaler capex year. - 22-23 Jul: $AMD Advancing AI event: Roadmap read through for foundry loading + advanced packaging + laser type demand into 2027. - 23 Jul: $INTC Q2: 18A yields + foundry commitments are probably the main variables w/ reads on US onshoring & packaging momentum. - 23 Jul: $IBM Q2: already lost a ~25% of its MC so let's see how brutal the market is on guidance misses. - 24 Jul: 10% global tariff expires & new tariffs on dozens of countries expected. It'd be a stagflationary factor that feeds the overarching Fed hike narrative. - 27 Jul: Kimi K3 full weights released - 28-29 Jul FOMC: rate hold expected per experts + Polymarket. Important to bear in mind that rate hikes (or signals of one) would be the AI trade's first genuine regime shift. - 29-30 Jul: $META, $MSFT, $AMZN earnings: more capex datapoints. - 30 Jul: June core PCE And any day we could get a US-Iran ceasefire. There's still a 10 day proposal on the table while strikes keep happening. A proper/confirmed truce would help oil prices and helps semis. Just for a high level timeline of the "main" important events coming up soon. All have some kind of impact on semis to varying degrees. AI capex of course will be most important when the hyperscalers report earnings.

Memory market update: - Counterpoint forecast a 20% QoQ increase for DRAM. - Trendforce are more conservative at 13-18% for conventional DRAM and 10-15% for NAND. - Morgan Stanley raised Q3 PC DRAM forecast to 15-20% increases QoQ from 3-8%. These aren't perfectly comparable baskets but the main conclusion is that tightness still persists. SK Hynix CEO and Chairman both confirmed supply tightness post-US IPO, potentially into the 2030s. - Samsung is reportedly seeking a Q3 DRAM ASP increase of up to 20% QoQ, with LPDDR increases potentially exceeding 20%. That would be their third consecutive quarterly hike after +90% in Q1 and +60% in Q2. This is above TrendForce's forecast but if price increases stick, $MU and SK hynix would likely follow. - TrendForce expects Q3 server DRAM contract prices to rise 13-18%. Multi year supply agreements limit price increases for some large volume US cloud customers. Which means customers without LTAs and incremental volumes sold outside those agreements would absorb the largest hikes. - SK hynix reportedly plan to scrap price caps in its new LTAs so that spot upside flows straight through, while $MU's SCAs carry floors and ceilings. - TrendForce estimates HBM will consume 22% of the top three suppliers' DRAM wafer input in 2026 while producing only 9% of DRAM bits. Those figures rise to 30% & 13% in 2027. This disproportionate wafer consumption is the main structural reason why conventional / server DRAM can remain scarce, even as capex increases. - On HBM4 itself, 2027 contract negotiations land around Q4'26 and Digitimes model HBM4 moving from ~$2/Gb in 2H26 toward $4-5/Gb next year. - Morgan Stanley suggest NAND remains undersupplied through 2027. - TrendForce expects mature SLC NAND pricing to rise 120-170% in 2H26, driven by shrinking mature-node capacity & MLC -> SLC migration. Positive read-through for $SNDK, Kioxia and $MU, while $SIMO offers controller leverage. - Worth noting Kioxia has filed for a US ADS listing, and $SNDK has raised NAND product pricing double digits while extending the JV with Kioxia to 2034. - $MU also recently broke ground on a ¥1.5 trillion Hiroshima expansion, targeting advanced DRAM & HBM shipments around summer 2028.

$IQE up 18.4% today after reporting "H1 performance ahead of expectations." This is why sticking to a thesis is so important... IQE have also upgraded their 2026 revenue growth guidance from 20% -> over 30%. Driven by InP demand for AI and data centre applications. - H1'26 revenue: £64m vs. £45m H1'25 - Strengthened balance sheet via $MTSI investment leading to debt-free position + bolstered cash position at £42m. I personally think their new ~30% rev growth target is slightly on the lower end - probably conservative estimates on purpose after some recent history of over-estimating growth too soon. But I do believe that we're in the midst of their financial inflection point with IQE forecasting "low-teens £m adjusted EBITDA." Hope they can continue growing sustainably. Looks like they're doing everything right currently, rather than going all guns blazing and absolutely trashing the balance sheet.

Just now: $NVDA disclose a 9.3% passive stake in $NBIS, following their investment from March. It's not "new" news/investment, but it's definitely a good reminder that it doesn't much sense to bet against Jensen right now...

$NBIS will become a "hyperscaler" very soon: Via two axes: 1. Cost of capital 2. Cost per token Everything else about a hyperscaler is downstream of those two variables. Looking at cost of capital alone: - Neoclouds are basically a spread business where they raise capital at one rate + earn a contracted return above it. - Most neoclouds fund expansion via equity (v. expensive) and enter into a loop of dilute -> deploy -> depreciate -> repeat. - Nebius's new $775M debt facility from last week breaks that loop. - Their debt facility is collateralised against contracted cash flows from an "investment-grade" customer, so the lenders are essentially pricing off $META / $MSFT receivables rather than Nebius's own credit. - That's v. bullish for Nebius if lenders price them in that way. Especially since early GPU collateralised neocloud debt was at double-digit rates. - The structure repeats. Management says it will replicate the facility against >$40 billion of contracted backlog. - Every new "investment-grade" contract therefore becomes a collateral factory and not just revenue. It manufactures cheap borrowing capacity -> which funds capacity -> which wins contracts. - Customers also pre-fund the machine: deferred rev rose $3.2B in Q1, driving $2.3B of op. cash flow on $399M of revenue. - Ofc that's a delivery obligation and not free money. But it's an obligation funded interest-free vs funding the same buildout w/ debt. Despite what Burry will say, this isn't financing circularity: - $NVDA $2B equity stake is a rounding error against a broader $20B+ capex programme. - And the backlog is cash contracts paid out of $META / $MSFT opco's and not roundtripped semis money. This "new" loop is essentially how AWS became AWS where they funded at bond rates while everyone else funded at much higher equity rates for like 15 years.

This is AI's version of WW2 food rationing. When rationing occurs, it means that the thing being rationed (food/compute capacity) is priced far below what the market would bear. In WW2, there was severe food shortages and rationing in the UK. As a result, not only did food prices rise, but so did land prices due to government attempts at boosting food production. You can map this WW2 analogy onto AI: - Food: AI inference, tokens, or access to the model. - Farms/food producers: AI labs like Moonshot, OpenAI, Anthropic etc. - Land: data centers and fab capacity. - Tractors: GPUs, memory and networking/optics etc. - Food rationing: subscription pauses, waitlists, usage caps, and rate limits. Ultimately, since food (model access) is being rationed, we need more land (DC capacity), meaning we need more tractors (GPUs, memory etc) to actually farm the land (fit the DCs). This is why it's been funny, yet shambolic, seeing clickbaity articles from reputable outlets claiming Kimi K3 to be another "DeepSeek moment".

Recommended reading for the weekend: 1. Simon Willison — Kimi K3, and what we can still learn from the pelican benchmark 2. J.P. Morgan — Powering the AI Revolution 3. Zephyr — How to break the memory supercycle? Or is it even possible? 4. TrendForce — Humanoid Robots Part 1: The US-China Divide and Who Controls the Supply Chain 5. Hugging Face — Welcome Inkling by Thinking Machines 6. $ASML & $TSM — Earnings Transcripts

The positive $NBIS news keeps coming: - Nebius raise $775M debt to accelerate growth. Priced very attractively at SOFR + 2.50%. With this, the facility was also "significantly oversubscribed", signalling institutional confidence in the overall quality of Nebius’s assets / counterparties / execution. To the point where they can now use customer contracts to unlock cheaper debt and not dilute shareholders to hell and back. They also touch on that execution piece in their release: "Nebius recently delivered the latest planned capacity tranche to Microsoft, and remains on track to deliver the remaining tranches consistent with the terms of the contracted schedule." Genuinely feels like Nebius have been doing everything in the right way recently. It would be very easy to mess things up and rush things when you've got surging demand and the desperate need to expand quickly. $100B.

> Don't be Intuit > Spend 20 years lobbying Congress so Americans can't file taxes for free > IRS Direct File finally dies, pop champagne, moat secured! > Perplexity drops an AI tax agent three weeks later that reads your W-2 for the price of a chatbot subscription > ChatGPT explains your 1099 better than the $209 "Deluxe" tier > Intuit response: open a physical TurboTax store in Soho! > Yes, a retail store...for tax software...in 2026 > Announce we'll pay for your Uber to come do taxes in person > CFO on earnings call: "customers buy confidence, not code" > Stock drops 20% during the call = most confident -20% you've ever seen > Five year low, congrats to everyone who bought the AI story at $700 > Strategy update: deliberately letting DIY customers leave > Translation: the ones who noticed "free" wasn't free > QuickBooks pivot: "usage-based pricing," aka the meter now runs while you cry > Mailchimp, purchased for $12B, currently held together with tape and apology emails > Flagship innovation: AI that finds deductions, then upsells you a human to check the AI > The human costs extra, the AI costs extra, the extra costs extra > Board response: raise prices, issue $1.75B in bonds, add "agentic" to every press release > Mention "AI" over 100 times during earnings call > Meanwhile, somewhere an accountant with a Claude subscription does your tax return in 15 minutes for $50

The deadliest mountain in the world is K2 in Pakistan. But how deadly will the new K3 model by Moonshot be? In my view, this is not another "DeepSeek" moment. Kimi K3 is net-positive for the AI trade and compute demand, while being a net-negative for Western fronteir labs. After reading many reviews on X, my understanding is that Moonshot are just a few months behind the fronteir, rather than a full generation behind. I will caveat that I am far from being an AI "expert". However, I believe I understand the commercials at a high enough level to comment on and summarize. So from a commercial point of view, K3 comes out at roughly half the cost of Opus 4.8 for a slightly better model overall. Moonshot is charging ~$3 per million input tokens and ~$15 per million output tokens, the same rate card as Anthropic's mid-tier Sonnet and nearly 4x its own previous model. In my opinion, these pricing dynamics are what makes the DeepSeek comparisons I've seen on X to be very lazy. DeepSeek in Jan 2025 was a deflation event where they had near frontier capability built very cheaply and effectively given away at such low prices which implied that Western AI capex was excessive. Moonshot is doing the opposite. It's charging Western prices because it believes it is selling capability, not cheapness, most likely because Chinese labs are starving for compute and actually need the revenue to continue building and serving demand. The business model for fronteir labs like OpenAI and Anthropic is essentially the monetisation gap between their own leading models and everyone elses. Both of those companies are raising money at valuations that assume that gap stays wide and highly monetisable for years to come (at growing rates). However, many AI experts on X say that the Kimi K3 gap can now be measured in months, and that the tier just below the frontier, where the bulk of real commercial workloads actually run, is potentially about to be served up at very low commodity prices. As a result, the labs' defensible ground shrinks to the true frontier, to enterprise trust and security, and to distribution. Revenue can keep growing while pricing power erodes, and in my view, it is the pricing assumption (not the demand assumption) that carries Anthropic's and OpenAI's lofty valuations. Using SoftBank as a proxy for OpenAI, we saw today that their stock price fell a huge 9% after Kimi K3 was released. I believe, now, that this valuation-digest was and is warranted. I know many of my followers will care about the AI trade in upstream names though. However, I do not view the latest Kimi K3 model as having a fundamentally negative impact on those companies. Every K3 token will still consume chips, memory and power that remain effectively sold out into next year. Moonshot will certainly need to secure additional compute to facilitate growing demand for their models. As of right now, it does seem like exposure to model-layer margins, lab valuations and their listed proxies looks worse. Conversely, exposure to the infra in upstream supply chain names that serves tokens regardless of whose model wins looks cheaper, all things considered, for no fundamental reason. However....to be slightly more contrarian - you could argue that if cheaper Chinese models come to market at a rate of knots and leads to margin compression for the likes of OpenAI and Anthropic ---> will that not have a negative effect on their spend in the long-term? As a result, a negative effect on the upstream AI supply chain? I am yet to think through this in much detail, but it certainly deserves exploring. I want to finally mention some of the technical experts I have enjoyed reading since Kimi K3 came out, as a non-technical person: - @zephyr_z9 - @scaling01 - @FundaAI If you want to be someone who is constantly learning about AI, these guys are must-follows in my opinion. Of course, as always, I would encourage anyone to correct me or debate me if I am wrong in any area.

Oof, $SPCX Starship launch aborted just now. Per Elon: "Next launch attempt hopefully in a few days." Just highlights how risky the space business is. Goes hand in hand with stock price volatility across the entire sector.

Appetite for the memory trade is still super high: Record inflows for the South Korea ETF $EWY this week. Tuesday: $814 million (previous record high) Wednesday: $1.1 billion (new record high) Investors are back to using $EWY as a proxy for the South Korea SK Hynix listing, just like in Q1. Rather than paying the ~25% premiums for the US listed SK Hynix ADR. And for added context on the demand for memory stocks: The memory ETF $DRAM is currently at record-high AUM levels at ~$25 billion, despite only being released three months ago.

AI and semiconductor names are down significantly over the past couple of weeks. However, what matters right now is for me to provide some useful context and "advice" on constructing your own investment philosophy. There's no better time to learn about yourself than when times are rough. Personally, my portfolio has taken a huge hit for a few reasons. Primarily because I pivoted around this time last year from a slightly more diversified base of stable technology compounders into a slightly higher concentration of higher beta and smaller market cap AI names. However, if you're an inexperienced investor, what I can tell you is that market drawdowns are normal and expected (even though we can never time them exactly). So if you plan to invest for decades, you should certainly expect to sit through many bear markets and many corrections. The first thing to internalise is the arithmetic of losses where a 20% loss needs a 25% gain to get back to even. Similarly, a 50% loss needs a 100% gain to recover your losses. This is why position sizing matters just as much as stock picking, and is a key reason why I'm against risky tools such as options or leverage for *most* investors. Your primary goal when playing this game is to keep playing. A blown-up account via excessive leverage or backfired options trading is the worst case scenario, no matter how attractive or easy "gurus" online might make it seem. That said, I do firmly believe in running a concentrated book of high conviction names that you can reliably track daily. The specific number of positions varies person to person depending on a few factors like your individual ability to keep on top of latest events for each holding, including second and third order effects from other company's news. However, every legendary investor's track record was built on a handful of high conviction positions. Sure, spreading capital across many names you barely understand can in theory reduce risk just because of the law of large numbers. But in my opinion (and experience), it just guarantees mediocrity. That said, concentration is a discipline of its own and is something I could write books on. With the aim of keeping thing consise, concentration only works if you can name, very precisely, what you're concentrated in. In simple terms: have you researched the company, sector and market to the point where you have utmost confidence in the trade? But with concentration, you *need* diamond hands if all things are equal with the company and nothing has changed. For example, $NVDA fell more than 50% in 2018 and ~65% in 2022. Anyone who capitulated in Oct 2022 sold one of the greatest companies of all time, probably because they lacked conviction in the trade. And in turn, did not have any sort of investment philosophy. So, you need to really sit down and talk to yourself right now, during this current AI drawdown, and ask yourself what your investment philosophy is. You could probably run the exercise with Claude or ChatGPT and get some pretty enlightening outcomes for yourself. But you must be honest for the good of your future self. There's no better time to learn what kind of investor you are than during red days and weeks.

$IQE has unfortunately not been performing well recently. However, we've only had net-positive news since May: - $TSEM multi year InP epiwafer agreement in June w/ minimum purchase commitments from year two - $14M multi year PO from a "strategic global technology leader" for AI/datacentre applications this week - $MTSI board involvement after anchoring a £81M raise to strengthen balance sheet That said, it does seem like IQE is simply resetting (similar to other high beta names like $SIVE) after going up parabolically in a few months. And Chinese export curbs on gallium + InP feedstock are inflating input costs with management also saying that they're sharing that pain with customers. I'm also looking at the fact that their balance sheet almost ruined them a few years ago - which is now solved thanks to £45M from MACOM as a strategic investor tied to LTAs. IQE is one of the only Western epi houses that can supply InP epiwafers at a scale that actually matters. And InP sits under every optical interconnect going into datacentres. Tower didn't sign a multi year supply deal and settle a long standing patent dispute in the process because it had alternative routes to source supply... So currently, you've got: 1. A repaired balance sheet. 2. An anchored strategic partner w/ Macom. 3. Contracted InP volumes. 4. An option on photonics too. However, risks are definitely real and please do not act on my words alone... They've had execution issues in the past e.g. too much internal resource in their wireless segment which has been dying a slow death over the past couple years. (They're correcting that now just by going from their investor decks). Plus of course a long dilution history. And China risks impacting input costs. Drawdowns like the one we're in currently are all part of the game. Where highly volatile businesses = highly volatile returns.