$DRAM The storage sector has been severely affected by recent sentiment setbacks, with storage stocks including Micron, SK Hynix, and SanDisk all pulling back significantly. Actually, there's no need to panic; there are two reasons:

1) Besides the inflation and interest rate hike expectations that re-emerged after non-farm payroll data, which put collective pressure on the U.S. stock market, giants like Micron and SK Hynix have clearly taken the opportunity to sharply cut their valuations. The trigger appears to be a report from the well-known semiconductor research firm SemiAnalysis, which pointed out that NVIDIA's Rubin rack CPU side SOCAMM DRAM capacity was cut from about 55TB to approximately 28TB as planned.
The market interprets this as a weakening of upstream NVIDIA's procurement demand, so companies in the supply chain naturally see their valuations decline. But in reality, this is just because of the severe global PDDR5X shortage, with NVIDIA proactively reducing configurations to accelerate large-scale deployment of Rubin and increase shipments. The core storage module HBM4 remains unchanged, so this does not affect the previous logical judgment of strong future demand for storage sectors;
2) The fundamental reason is that the storage sector has been overly driven by FOMO in the short term, because although the strong demand from the AI supercycle for storage hasn't changed, the current market valuation of storage giants is entirely dependent on NVIDIA's valuation and its corresponding procurement order demand. Once NVIDIA shows a "adjustment" plan in procurement, it is instantly interpreted as demand peaking, triggering a stampede-like correction;
But honestly, relying solely on upstream procurement orders and storage modules to link valuation expectations during the AI supercycle is inherently irrational. Storage inherently has a very strong hardware upgrade cycle property. When valuation expectations driven by order forecasts reach a certain point, they will naturally slow down rationally and stabilize. Rather than saying that this storage decline is due to procurement demand, it’s more accurate to say that the irrational valuation model supported by past orders has been corrected, which is reasonable and necessary. In the long term, storage remains the most solid seller in AI infrastructure; short-term sentiment setbacks do not affect the long-term fundamentals.