u/Adrian-The-Great

Broadcom co-designs custom AI chips for six hyperscalers and guided FY2026 AI revenue to $56bn (up 180%), with $100bn+ expected for FY2027. The market is underrating Broadcom's ability to capture AI market share as hyperscalers increasingly look to custom silicon alternatives to NVIDIA's GPUs. Broadcom is a strong buy as a primary beneficiary of hyperscalers diversifying their AI hardware supply chains. A general slowdown in hyperscaler AI capex would negatively impact Broadcom's aggressive forward revenue guidance.

Power and data center infrastructure stocks like Bloom Energy (BE) and IREN were part of a highly successful AI physical layer thesis that recently experienced a severe short-term drawdown. The fund that blew up had the right read on where AI capital would flow, but failed due to 400% leverage. Unlevered investors can now buy these physical layer assets at a steep discount following the forced liquidation. Buy unlevered positions in AI power and infrastructure providers to capture the long-term structural build-out. Regulatory hurdles for power generation or a slowdown in data center construction.

AI infrastructure and memory stocks like Micron (MU), SanDisk, and SK Hynix recently suffered massive 35-47% drawdowns, wiping out over-leveraged funds. The underlying thesis—that AI model scaling requires massive physical infrastructure and memory—remains highly accurate. The recent crash was driven by forced liquidations of levered players, not a fundamental failure of the AI build-out. Long-term, unlevered investors can capitalize on the recent massive sell-off in AI infrastructure names, as the decade-long capital reallocation thesis remains intact. AI model scaling hits a wall, or hyperscaler capital expenditures slow down significantly.

Micron locked in ~$100B in take-or-pay agreements with price ceilings at current market levels through 2030, covering ~40% of revenue. Record gross margin of 84.9% was driven by price (+62%), not volume (+3%). Selling upside cheaply indicates management expects prices to decline; the cycle is peaking. SK Hynix’s $26.5B IPO will fund capacity that ends the shortage, reinforcing the bearish commodity cycle logic. Micron’s business is highly commodity-like, and the price ceiling contracts confirm the market is near peak pricing. Shorting Micron offers a play on mean reversion in DRAM prices. HBM demand could sustain high prices longer than expected; Micron’s contract floors may provide downside protection; the memory shortage could extend past 2030.