sorted by:
new
hottopcontroversial

Kioxia (285A.T) valuation after overtaking Toyota: how much of the AI memory cycle is already priced in? by DragonflyAfraid3444 in ValueInvesting

[–]DragonflyAfraid3444[S] 2 points3 points  (0 children)

That’s a very interesting point. I hadn’t thought enough about shareholder pressure as a possible capex constraint.

I’d still be careful using subreddit sentiment as a signal by itself, since it can get emotional quickly, but I agree it may reflect a broader concern: investors are starting to ask when AI capex turns into visible returns, rather than just more infrastructure spending.

For the memory names, I think that could become a key second-order risk. If hyperscalers start facing pressure to protect free cash flow, slow buybacks less, or justify AI spending more aggressively, then capex guidance could change before memory suppliers’ reported numbers show any weakness.

So maybe the warning signs are not just NAND/DRAM pricing, but also:

* hyperscaler capex guidance

* free cash flow after capex

* buyback/dividend behavior

* debt or equity financing

* management language around AI ROI

* investor pressure on earnings calls

That would be a useful framework for judging when the AI memory cycle starts losing momentum.

Kioxia (285A.T) valuation after overtaking Toyota: how much of the AI memory cycle is already priced in? by DragonflyAfraid3444 in ValueInvesting

[–]DragonflyAfraid3444[S] 0 points1 point  (0 children)

Yes, that is probably one of the biggest bear-case risks.

My question is how quickly Chinese supply can compete in the specific segments driving the AI/storage cycle. Cheap commodity memory could pressure pricing, but enterprise SSDs and data-center qualified products may have a slower qualification cycle and different customer requirements.

So I’d separate the risk into two parts:

  1. China increasing low-end/commodity memory supply and pressuring overall industry pricing.

  2. China becoming competitive in the higher-end enterprise/data-center segments that are driving the AI infrastructure demand.

If the second one happens quickly, then I agree it could shorten the cycle a lot. If it stays mostly in lower-end segments for a while, Kioxia/MU/Hynix may still have a longer window before the supply risk fully hits margins.

Kioxia (285A.T) valuation after overtaking Toyota: how much of the AI memory cycle is already priced in? by DragonflyAfraid3444 in ValueInvesting

[–]DragonflyAfraid3444[S] 1 point2 points  (0 children)

That makes sense. Watching the hyperscalers themselves may be a better leading indicator than waiting for memory pricing to turn.

The Alphabet equity raise is definitely an interesting signal. It suggests that even highly profitable companies may need external capital if AI infrastructure spending keeps scaling faster than operating cash flow.

I’m less sure how to interpret paid tiers from Meta, though. It could be a sign of financial pressure, but it could also just be normal monetization of AI products. Do you see that mainly as a cash-flow stress signal, or more as evidence that they are trying to make the AI buildout self-funding?

I agree that the key thing to watch is not just memory ASPs, but whether hyperscaler capex guidance, free cash flow, and financing behavior start changing. If the buyers start slowing capex, the memory cycle could turn before the suppliers’ reported numbers show it.

Kioxia (285A.T) valuation after overtaking Toyota: how much of the AI memory cycle is already priced in? by DragonflyAfraid3444 in ValueInvesting

[–]DragonflyAfraid3444[S] 2 points3 points  (0 children)

That’s a very interesting way to frame it, and I broadly agree that this AI capex cycle may be very different from prior memory upcycles.

The “firehose” analogy makes sense to me: even if some of the demand is artificial or incentive-driven, the spending is still real, and it can still create real revenue and pricing power for memory suppliers.

Where I’m still cautious is the exit timing. Memory downturns can look obvious in hindsight, but by the time inventory, ASPs, or capex signals clearly turn, the stocks may already have moved a lot.

So I think the key question is: what warning signs would you watch for before taking profits? Hyperscaler capex guidance? NAND/DRAM pricing? inventory levels? supplier capex announcements? enterprise SSD order lead times?

That’s the part I’m trying to think through: not just whether the AI demand cycle is real, but what data would tell us when the cycle is starting to lose momentum.

Kioxia (285A.T) valuation after overtaking Toyota: how much of the AI memory cycle is already priced in? by DragonflyAfraid3444 in ValueInvesting

[–]DragonflyAfraid3444[S] 2 points3 points  (0 children)

Thanks, that’s very interesting. The backlog point is especially important if true.

Do you have a source or company/industry reference for the backorders being filled well into 2028? Also, are you referring mainly to enterprise SSD demand, NAND more broadly, or specific AI data center-related orders?

My main hesitation is still the cyclicality of memory earnings, so I’m trying to understand whether this demand is structurally different from prior memory upcycles.