#股票交易分享挑战 SanDisk surged 35% in one week—what should we do?
Over the past 5 trading days, SanDisk surged 35.4%, repricing the entire storage sector, while 2x Hynix fell 90%, leaving us retail investors utterly devastated! But this is the most torturous part of cyclical stocks: the better the earnings, the more the market worries that a peak could arrive at any time. We all know that the fundamentals of the major storage giants are basically sound, and AI demand remains strong, but storage prices have surged more than tenfold in six months, so we are genuinely afraid that prices have peaked! The decline seems endless... Even if 2x Hynix stays at 28 for two or three days, we still would not dare buy it! But this time, SanDisk seems to have really given us a reassuring dose of confidence.
01 SanDisk reprices the storage industry
In the past, the storage industry made money mainly by raising spot prices, but once manufacturers expanded capacity, prices would quickly fall back, trapping the industry in an endless cycle of price rises and falls. However, on August 13, SanDisk announced its high-profit targets for the next three fiscal years at its Investor Day, setting a gross margin target of 80% and a free-cash-flow margin of 50%. At the same time, it locked in 8 customers through long-term agreements, with contract value totaling $93.9 billion, and pledged to return 100% of excess cash to shareholders.
By locking in profits in advance, SanDisk has freed its stock price from being held hostage by fluctuations in spot prices! It can be said to have opened a window for the stock-market performance of the storage industry. SanDisk focuses on NAND, while Hynix and Micron also have core strengths in DRAM and HBM. Although the three companies’ businesses are not exactly the same, the market is seeing the same industry signal: AI-driven storage demand may last longer than expected, and leading manufacturers are also beginning to shift from chasing production volume to protecting margins. If this model works, storage companies such as SanDisk, Hynix, and Micron will no longer simply be cyclical stocks betting on price fluctuations. They could achieve more stable profits and higher valuations while solidifying their global positions. — SanDisk’s industry signal is spreading to Hynix and Micron
02 Our confidence has been restored by the stock-price rebound
When the sector plunged at the end of July, the various investment groups and communities frequented by Ming Liangzai were filled with retail investors’ despair. Everyone was saying, “The cycle has peaked” / “All the positive news has been priced in” / “Institutions exited long ago” / “Retail investors have been getting crushed.” Dan Bin publicly said he was putting his remaining ammunition into Hynix, which sparked considerable controversy at the time. But now that SanDisk has surged and Hynix and Micron have followed with a rebound, the pessimistic mood immediately changed to: “The storage sector has successfully bottomed out!”
03 So, what should we do next?
Although SanDisk’s long-term agreements can reduce volatility, they cannot guarantee that customers will always fulfill their obligations; strong AI demand does not mean that PCs and smartphones can absorb unlimited price increases.
SanDisk’s positive catalyst looks more like a rebuilding of confidence than the end of the AI industry’s cycle.
US SEC 13F holdings disclosures show that Gao Yi significantly increased its positions in Micron and SanDisk in the second quarter, further reinforcing the idea that “institutions had already positioned themselves early.” However, institutional holdings disclosures cover data from April to June and are lagging; they cannot directly be treated as a reason to buy today. In addition to fundamental support, this rally also includes covering by funds that missed the initial move and momentum-chasing sentiment.
1️⃣The risks of shorting are very high;
2️⃣You may consider appropriately trading around your position to reduce its cost basis;
3️⃣Only when SanDisk holds above $1,500, Micron holds above $1,000, and 2x Hynix holds above HK$50+, will the bottom truly be confirmed.
$SNDK
