Pivot Point Capital
Moonshot play $TGEN finally starting to move after a long consolidation.. +35% from avg cost of $9.06 to $12.25 Moving on no news though is kind of strange. Not sure if it’s insider front running or just a small cap rerating. Hopefully $VRT just buys it out…
Closed $TGEN long @ $7.75 for -16% loss
Cutting more low caps. Just a small moonshot so the loss only stings
Cutting more low caps. Just a small moonshot so the loss only stings
Pivot Point Capital
Added $CRCL short @ $130.04
$CRCL short finally working, -8% after print. Haven’t looked at the ER but there’s really no point when the name is so far removed from fundamentals
Anyway, closed 20% of the short here @ $89 for +30% gain
Anyway, closed 20% of the short here @ $89 for +30% gain
Anon poll: what is this channel's value add to you?
Anonymous Poll
49%
Profit from following trade setups/calls
80%
Idea generation (exposure to new names)
26%
Learning about sizing
47%
Learning about how to evaluate a stock
1%
No value add
Pivot Point Capital
Also added $SNDK @ $229 after the print
Exited this additional tranche @ $268 - $270 for +17% gain. Original $SNDK position still remains.
Pivot Point Capital
Added $MU @ $253.5 That’s probably the last time I’m adding to memory, for awhile
Added more $MU @ $242-$246, with the $SNDK allocation that was just exited. $MU is my largest memory position right now
Pivot Point Capital
Got in $PSTG short yesterday @ $89.66
Took advantage of the mini bounce yesterday to fully fill on $DELL and $PSTG shorts @ $142 and $89 respectively
Short basket as above, with ascending size from top to bottom (PSTG largest short, SHAK smallest)
Short basket as above, with ascending size from top to bottom (PSTG largest short, SHAK smallest)
Pivot Point Capital
Added $SDNK and $MU longs @ $114.63 and $168.50 respectively, as explained earlier.
$SNDK now at $283, +146% from our entry just one month ago... One of my best plays this year. Sized this up huge from the get go, and rode the original position all the way till this point.
I'm a generalist so I honestly have no alpha in this highly cyclical sector. Simply the right time, right place, and right mental models to catch this move. But some thoughts:
On one hand, the chart looks parabolic but on the other, DRAM/NAND prices are still exploding higher everyday driven by a collision of cyclical forces like the inflection in AI demand, a recovery in CPU & AI server, and recovery in smartphones.
If prices continue exploding higher (which flows directly to the btm line), I think Street's FY26E EPS of $11.07 is far too low..
>$20 and even $25 eps seems achievable. At $25 eps, Sandisk is only trading at 11x FY+1 p/e now, even after such a parabolic rally. Not too bad, right? Though that's just peak earnings, one has to also consider what is the stock's normalized earnings after this upcycle ends.
I'm a generalist so I honestly have no alpha in this highly cyclical sector. Simply the right time, right place, and right mental models to catch this move. But some thoughts:
On one hand, the chart looks parabolic but on the other, DRAM/NAND prices are still exploding higher everyday driven by a collision of cyclical forces like the inflection in AI demand, a recovery in CPU & AI server, and recovery in smartphones.
If prices continue exploding higher (which flows directly to the btm line), I think Street's FY26E EPS of $11.07 is far too low..
>$20 and even $25 eps seems achievable. At $25 eps, Sandisk is only trading at 11x FY+1 p/e now, even after such a parabolic rally. Not too bad, right? Though that's just peak earnings, one has to also consider what is the stock's normalized earnings after this upcycle ends.
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Pivot Point Capital
$SNDK now at $283, +146% from our entry just one month ago... One of my best plays this year. Sized this up huge from the get go, and rode the original position all the way till this point. I'm a generalist so I honestly have no alpha in this highly cyclical…
Kioxia $285A.JT reported underwhelming earnings, putting a dent on the memory rally
Pivot Point Capital
Kioxia $285A.JT reported underwhelming earnings, putting a dent on the memory rally
Seems like some idiosyncratic poor execution by Kioxia as it’s the only memory company that missed this season; not sure how their ASPs even went down when memory prices are rising everyday.
Added to $MU @ $246
Added to $MU @ $246
Pivot Point Capital
Seems like some idiosyncratic poor execution by Kioxia as it’s the only memory company that missed this season; not sure how their ASPs even went down when memory prices are rising everyday. Added to $MU @ $246
Closed 50% of $SNDK at $263, added more $MU @ $242 and $INTC @ $36.8-$37
$NVDA @ $186 makes sense as a short hedge to the AI bubble bursting if you have duration.
Growing competitiveness from TPUs/accelerators + $MSFT CEO mentioning that they’re limiting GPU capex because they don’t want to run the risk of tech obsolescence due to Nvidia’s 1 year product cycle.
If PPW improvements slow down from one gen to the next, then hyperscalers are less inclined to spend on next gen GPUs as the legacy ones that are fully depreciated would work almost as fine with higher resulting “cash flows”.
Growing competitiveness from TPUs/accelerators + $MSFT CEO mentioning that they’re limiting GPU capex because they don’t want to run the risk of tech obsolescence due to Nvidia’s 1 year product cycle.
If PPW improvements slow down from one gen to the next, then hyperscalers are less inclined to spend on next gen GPUs as the legacy ones that are fully depreciated would work almost as fine with higher resulting “cash flows”.
Ugly day no two ways about it.
AI spend concerns were exacerbated by OpenAI’s comments about wanting govt’s backstop, CRWV delays dragging down the neoclouds & power providers, Satya comments as above, Kioxia’s print dragging down memory which was one of the last few green AI sectors, and Fed comments on high inflation and a potential push out of cuts. Maybe also some sell the news on the lifting of govt shutdown
Actually all things considered, I would have expected the markets to be down more. This reminds me of a few months back when MSFT reportedly cancelled some DC leases, which caused the AI stocks to chop around violently for awhile. Essentially the market has run out of bullish catalysts in the near-term and is now overly jittery on headlines.
In times like these important not to overtrade, stick to highest conviction ideas and touch grass. Let the markets resolve to its equilibrium before being aggressive again.
AI spend concerns were exacerbated by OpenAI’s comments about wanting govt’s backstop, CRWV delays dragging down the neoclouds & power providers, Satya comments as above, Kioxia’s print dragging down memory which was one of the last few green AI sectors, and Fed comments on high inflation and a potential push out of cuts. Maybe also some sell the news on the lifting of govt shutdown
Actually all things considered, I would have expected the markets to be down more. This reminds me of a few months back when MSFT reportedly cancelled some DC leases, which caused the AI stocks to chop around violently for awhile. Essentially the market has run out of bullish catalysts in the near-term and is now overly jittery on headlines.
In times like these important not to overtrade, stick to highest conviction ideas and touch grass. Let the markets resolve to its equilibrium before being aggressive again.
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Pretty interesting. The Big Short is one of my favourite movies. Not agreeing with Michael Burry’s views (for now) but the parallels here for him are uncanny.
https://x.com/onechancefreedm/status/1988823273287635403?s=46
https://x.com/onechancefreedm/status/1988823273287635403?s=46
X (formerly Twitter)
EndGame Macro (@onechancefreedm) on X
Why I Think Michael Burry Is Shutting Down Scion Now
Let’s put a few things together…Burry’s liquidation letter, his depreciation thread on the hyperscalers, and his “me then, me now” Big Short meme and he’s basically spelling out one story.
He thinks we’re…
Let’s put a few things together…Burry’s liquidation letter, his depreciation thread on the hyperscalers, and his “me then, me now” Big Short meme and he’s basically spelling out one story.
He thinks we’re…
Pivot Point Capital
Closed 50% of $SNDK at $263, added more $MU @ $242 and $INTC @ $36.8-$37
Closed all remaining $SNDK @ $252-$257, bought more $MU @ $242
$MU is my only memory position now, with a little bit of $HY9H
$MU is my only memory position now, with a little bit of $HY9H
Pivot Point Capital
Seems like some idiosyncratic poor execution by Kioxia as it’s the only memory company that missed this season; not sure how their ASPs even went down when memory prices are rising everyday. Added to $MU @ $246
Seems like Kioxia’s poor print was because they signed a Long Term Agreement with AAPL right before NAND spot prices went ballistic, causing them to not benefit from rising memory prices.
While it might not have been public information in this case, it’s a good example of the importance of examining contract structures of B2B businesses.
While it might not have been public information in this case, it’s a good example of the importance of examining contract structures of B2B businesses.
Pivot Point Capital
$CRCL short finally working, -8% after print. Haven’t looked at the ER but there’s really no point when the name is so far removed from fundamentals Anyway, closed 20% of the short here @ $89 for +30% gain
Closed all remaining $CRCL short @ $81.5 for +33% gain on the entire position. Borrow fees spiked to >40% p.a. yesterday, too high to remain short
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Pivot Point Capital
Added new $DELL short @ $142.8 For the past 2 years, Dell has been selling AI servers at 0% margins in the hopes of selling after-sales storage & services attach at higher margins. Mgmt has repeatedly sold the narrative that for every $1 of server spend,…
MS downgrades DELL to UW from OW, cuts TP from $144 to $110
MS note below is in line with our thesis from a week ago. Memory is 40% of the BOM of traditional servers and 25% of PCs.
Hardware OEM/ODMs face growing risk of margin pressure as the memory supercycle intensifies amidst a tepid hardware demand backdrop. Secular opps in Gen Al/Data Proliferation remain in-place but cyclical headwinds are growing. We're stepping to the sidelines on a number of OEM's as a result.
Key Takeaways
• We are in an unprecedented memory cycle, with spot NAND and DRAM prices — key components in hardware devices - up 50% and 300% in the last 6 months.
• History tells us these cyclical memory supercycles begin to play out via gross margin and multiple compression 6+ months after costs first increase.
• We model Global OEM/ODM gross margins down a median 60bps Y/Y, in 2026 vs. Street up ~10bps Y/Y. MSe now 11% below CY26 Consensus EPS across coverage.
• Global PC and Server (more DRAM) OEMs/ODMs more at risk than Storage OEMs (more
NAND), with Dell, Lenovo and Asustek most 'at-risk
= Downgrading DELL, HPQ, Asustek, and Pegatron to Underweight, HPE, Lenovo, and Giga-byte to Equal-weight.
MS note below is in line with our thesis from a week ago. Memory is 40% of the BOM of traditional servers and 25% of PCs.
Hardware OEM/ODMs face growing risk of margin pressure as the memory supercycle intensifies amidst a tepid hardware demand backdrop. Secular opps in Gen Al/Data Proliferation remain in-place but cyclical headwinds are growing. We're stepping to the sidelines on a number of OEM's as a result.
Key Takeaways
• We are in an unprecedented memory cycle, with spot NAND and DRAM prices — key components in hardware devices - up 50% and 300% in the last 6 months.
• History tells us these cyclical memory supercycles begin to play out via gross margin and multiple compression 6+ months after costs first increase.
• We model Global OEM/ODM gross margins down a median 60bps Y/Y, in 2026 vs. Street up ~10bps Y/Y. MSe now 11% below CY26 Consensus EPS across coverage.
• Global PC and Server (more DRAM) OEMs/ODMs more at risk than Storage OEMs (more
NAND), with Dell, Lenovo and Asustek most 'at-risk
= Downgrading DELL, HPQ, Asustek, and Pegatron to Underweight, HPE, Lenovo, and Giga-byte to Equal-weight.
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