Veteran investor: memory stocks aren't cheap even at P/E of 3 as LTAs are meaningless
bookwormengr · x · 2026-11-06
A veteran investor argues memory industry LTAs are basically meaningless: they mostly get customers to shoulder part of the memory makers' capex, and once prices fall customers happily forfeit deposits and walk away. Historically, whenever prices dropped more than 60% from peak, customers broke signed LTAs.
@bookwormengr adds his takeaways: LTAs do have (unpleasant) exits; memory is a commodity with brutal year-to-year swings, hence low P/E; unlike hyperscale cloud services, which ramp up and down far more slowly.
Bottom line: even if a 2027 shortage is certain and stocks trade at P/E 3 on 2027 operating profit, uncertainty about 2028 makes it hard to justify a higher valuation.
More from Infra
- Thom Wolf Releases Free MoE Training Handbook After 800K GPU Hours of Experiments — Thom_Wolf · 2026-11-06
- Google's Antigravity routes all tool calls via MCP through Substrate actors, new open-source env repo — rakyll · 2026-11-06
- Iceland pitch to Musk: drill for free geothermal power, build datacenters outside EU reach — djcows · 2026-11-06
- Google to spend $17B on massive AI data center in Wyoming — Polymarket · 2026-11-06
- Hugging Face burns 800K GPU hours to release free 70K-word MoE training handbook — Thom_Wolf · 2026-11-06
- Coherent revenue jumps 50% to $2.37B, signs ~$20B five-year PhotonLink deal — BenBajarin · 2026-11-06