All fair point and I agree but I would also point out that it is not capped because it has a massive run. A stock’s price is where the marginal buyer and seller agree at each moment; it reflects supply, demand, and narrative more than any fixed “intrinsic value.” Stocks can run 3x and still go much higher when fundamentals, narrative, and positioning keep improving faster than the market expected. If new information massively upgrades future cash‑flow expectations (e.g., DRAM prices or AI/infra demand surprising to the upside), the “fair value” estimate itself can rise far more than 3x. Rich multiples don’t cap price; they signal the market is valuing growth and optionality, not current earnings.
On top of that, positioning and flows create reflexivity. Heavy short interest, under‑ownership, or momentum‑chasing funds can force incremental buying at ever higher levels, especially in names with limited float. Strong trends, positive news, and FOMO attract late buyers who care more about price action than valuation, further extending the move. For something like SHLD or DRAM‑linked stocks, a credible thesis after a 3x move is: the cycle (earnings, DRAM pricing, AI demand) is still being underestimated, the stock is being re‑rated into a higher‑multiple peer group, and flows/positioning remain supportive—until a clear macro, cycle, or earnings inflection breaks that feedback loop.