🥛 Elon vs. Melvin 🥊
AI Summary
The newsletter covers the market selloff in memory stocks after China's CXMT announced progress on 4F² DRAM. It presents the debate between Elon Musk and Milk Road analyst Melvin over whether CXMT is a near-term threat, with Melvin arguing the market overreacted and Elon countering China's ability to scale. Analysts remain bullish on Micron due to long-term deals and cheap valuation.
Key Facts
Author Takes
CXMT 4F² DRAM threat
Market got way ahead of itself; CXMT still has to prove yields, pricing, and volumes; HBM not affected; Sandisk NAND irrelevant.
China's manufacturing threat
Once China learns to make something, it can often outproduce the rest of the world; RAM was a low-margin commodity 3 years ago; HBM will be harder to crack.
Micron stock valuation
Micron looks cheap at ~6x forward earnings; long-term deals cover 35%+ revenue through 2030; demand outrunning supply through 2028.
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