AI Memory Stocks Are Crushing the Market
The bottleneck is spreading across DRAM, NAND, SSD controllers, HDDs, advanced packaging, process control, server racks, and wafer fab equipment. Every layer of the stack is being repriced as AI workloads demand more bandwidth, more capacity, and faster data movement. Source: Sergey
The semiconductors ETF $SMH is up roughly +153% over the past year, the strongest 1-year performance on record going back to 2001 and roughly 4 standard deviations above the long-run average.
As DataTrek notes, staying bullish from here increasingly requires confidence that the semiconductor cycle and AI-driven backlog can remain durable for much longer. Source: The Market Ear
The S&P500 has rallied 16% since the March 30 lows.
10 stocks have been responsible for almost 70% of this rally, with Alphabet $GOOG and Nvidia $NVDA alone accounting for 25% of the whole index’s returns. Source: Negligible Capital
$GOOGL trades at 133x free cash flow.
For context: its pre-COVID multiple was ~20x. And free cash flow hasn't grown since 2021. GQG Partners — one of the world's top institutional investors — just published a full research note titled: "Not Much Alpha Left in This Bet." Their three concerns: 1. AI is cannibalizing Google's core search revenue. Over 50% of searches may now end without a single click. No click = no ad impression. 2. CapEx is exploding. Google Cloud's capital spending now exceeds the revenue it generates. $175–185B in CapEx planned for 2026. Google Cloud generated $ 59B in revenue in 2025. 3. Advertising is cyclical. When the economy slows, ad budgets are the first to be cut. The last time this happened — 2022 — the stock fell 40%. Is Alphabet priced for perfection ? Source: Thierry from arvy @ThierryBorgeat
BoA says "say goodbye to the 'equity shrinkage' bull case since the early 00s":
"a confluence of factors systematically reduced available public equity year after year – more buybacks, longer private incubations, more takeprivates, low rates, ample liquidity, etc. "Today, an issuance deluge may be imminent: the three largest private companies represent >$2tn (though market cap included on indices may initially be lower flow, low-float stocks based on rules/proposals from index providers such as Nasdaq and Russell) Source: Neil Sethi
We might soon have several $5T+ market cap companies...
Note how Alphabet is closing in on Nvidia in the battle for the world's most valuable company Source: companiesmarketcap.com
Hedge funds are offloading Magnificent 7 stocks at an UNPRECEDENTED pace:
Hedge fund net exposure to the Mag 7 is down to ~17% of total North American net exposure, near the lowest in 3 years. At the same time, the top-most purchased stocks by retail investors last week were Alphabet, $GOOGL, at +$273 million, Micron, $MU, at +$243 million, and Tesla, $TSLA, at +$234 million. This was followed by Meta, $META, at +$210 million and Intel, $INTC, at +$197 million. This means hedge funds are effectively offloading Mag 7 exposure directly to retail buyers. Wall Street is dumping tech stocks to retail. Source: Global Markets Investor, Morgan Stanley
Wall Street projects hyperscalers’ free cash flow to fall by over 70% from its peak by the end of 2026, even as earnings keep climbing
Source: Christophe Barraud, Bloomberg
