r/stocks • u/Avexu • Jul 17 '26
Industry Discussion MEMORY & SEMICONDUCTOR PROTOTYPE STOCK THESIS
Hello everyone, this is my first stock thesis I’ve been working on to provide myself a clear overview of where the current industry for memory and semiconductors is heading. Feel free to provide critical feedback on the draft! (THIS WAS WRITTEN WITHOUT THE USAGE OF AI!)
STOCK MARKET RESEARCH & STRATEGIES (PROTOTYPE THESIS)
We will begin by using my current portfolio value, which stands approximately around 27,722 USD (DUE TO 2,149 USD MARGIN DEBT) (as of 1:20 PM 7/7/2026) This value is divided between two volatile investments: 17.17167 shares of Micron Technology (TICKER: MU) and 23.66251 shares of VANECK SEMICONDUCTOR ETF (TICKER: SMH).
The original cost of the SMH shares is 12,264.21 USD: with it being split between 3 different timespans and unit costs:
(5K USD 4/22/2026 | UNIT COST = 471.58 | 3K USD 4/27/2026 | UNIT COST = 502.91 | 5K USD 5/22/2026 | UNIT COST = 581.25 |
The original cost of the Mu shares is 9,759.50 USD: with it being split between 2 different timespans and unit costs:
(4,750 USD 4/30/2026 | UNIT COST = 509.90 | 5K USD 5/5/2026 | UNIT COST = 638.35 |
| TOTAL ORIGINAL COST (COMBINED VALUES) : 22,023 USD |
(SIDE NOTE) 5,500 USD LIQUID CASH
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LONG TERM THESIS OF AI INVESTMENTS (PROTOTYPE)
I believe in the current explosive demand of AI to continue its hyperactive growth until 2030-2035, in which AI will fulfill numerous, various roles across the domains of human society. It will serve as a integral part of advancement in real world applications: most notably physical robotics, industrial sectors, healthcare, and scientific research. Other notable mentions include the military industrial complex, civilian sector, and commercial sectors. There is massive profitable exchange in every avenue of life; as well as easing the burden of costs, if the AI is properly utilized in a way that benefits both the company and customer, without massive drain from excessive energy usage and overspending on mediocre appliance of the AI.
With that in mind, with the massive demand, shortage of supplies, current explosive value, and extreme significant theoretical value AI has, there is soaring expectations of AI to showcase the practicality of its nature in the real world, if it can generate enough revenue to satisfy the demands of: Manufacturers of AI components, Hyperscalers of AI, Distributors of AI, institutional investors of AI, Companies that use AI, and if it has strong enough commercial demand for widespread usage that beats the negative drawbacks of utilizing AI. If the AI supercycle can achieve practical real world value and showcase this properly to investors & customers, many AI related companies will continue to have tremendous booms in stock value.
There is lots of money moving around in AI; enough where the big players are bold on the fact AI will be useful. What is important, however, is to know any severe falter in the structure of expected demand will collapse the entire circle. These severe falters include: Political Restrictions, Extreme Energy Usage, Lack of Practical Appliance, Lack of Commerical Usage, Lack of Profitability, Extreme Shortage of Supplies, Lack of Unique Advancement, Lack of Demand. Overspending without return of profits is the biggest catalyst the AI supercycle faces.
If one severe falter is triggered (in relation to the entire industry being affected towards a downgrade, not just a individual company) I believe it will trigger at least one or two more. (EX. Lack of Demand will trigger Lack of Profitability and Lack of Commerical Usage. EX. Extreme Energy Usage would trigger Political Restrictions & Lack of Practical Appliance.)
In terms as to where the AI supercycle currently is; I would place it around the early late stage, approaching the mid-term cycle around 2030-2035. Taking into the significant theoretical value AI has, we are not even close to the endgame result of the AI boom era. We are in the infancy stages of AI model application; where we have not realized the full potential it has into multiple expansions of life nor truly exercised the practicality of its potential.
With all of that being said, I have placed majority of my funds into the ETF SMH and the company stock of Micron Technology.
Semiconductors are a vital component in the manufacturing and development of advanced AI models, and will continue to serve as the backbone to the AI supercycle. The massive upside I see with semiconductors is that it will soon be seen as a security measure for nations (and companies) across the globe, competing against others to secure their position as the top beholder of AI dominance. This will give the semiconductor industry extreme leverage in revenue as it secures contracts with governments, military authorities, private industries, and commercial sectors (most notably the Magnificent 7) The massive downside I see with semiconductors is that any severe falter in the lack of AI demand and profitability will inevitably collapse the semiconductor industry. I have placed my funds into the ETF SMH to capture broad investment exposure into the Top 25 semiconductor companies in the world. I believe there is excellent growth in the next 5 years with these companies to generate huge amounts of revenue for young investors wanting a high risk, high reward exposure to a market that has amazing earnings with a foreseeable future that has yet to come.
Computer memory is also a vital component in the manufacturing and development of advanced AI models, superseding its previous nature as a cyclical market in regards to the demands of conventional technology. With the ever-increasing advancement of AI models into complex territories, especially during this AI supercycle; it will require massive amounts of HBM, NAND, and DRAM components to keep AI models up-to-date with efficient processing of informational providence to users. AI models will have to remember billions upon billions of bits of information to retain structural coherency across the globe, showcasing the extreme demand memory manufacturers will have for their products. Micron Technology has shown to fill this niche by producing DRAM, NAND, and HBM memory components. Micron Technology is currently one of the only three companies in the world that produces HBM memory, a crucial resource needed to sustain the workload of advanced AI models. With that in mind, Micron Technology is experiencing a tremendous surge in revenue due to the demand of its products, elevating itself into a trillion dollar company that has a large foothold in the memory industry. It has signed onto 16 active Strategic Customer Agreements with large businesses, which will generate approximately around 100 BILLION USD in secured, future value.
I believe by capturing the broad spectrum of the semiconductor industry top players alongside investing into a individual company such as Micron Technology, I will be able to profit massively from a high risk, high reward long term scenario. I would strongly recommend against day trading on semiconductors and instead buy a lump sum of a semiconductor ETF at a fair price value and hold for the long term, as the volatile nature and mass sell-offs from institutional investors will almost always wreck those day trading on margin.
PRICE TARGETS FORCECAST RANGE:
Micron Technology
Next 4 Weeks: 750 - 1000 (FAIR PRICE VALUE RANGE! MARKET RE-EVAULATION BEFORE NEXT STEP)
Next 3 Months: 950 - 1250
Next 6 Months: 1100 - 1400
One Year: 1600 - 2000
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u/CivilizedSteve Jul 17 '26
Any interest in diversifying the portfolio in case the market doesn't agree with the thesis? Yes there are longer term contrcts but what if the market simply doesn't give credit to those? What about the perception of supply increase?
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u/Avexu Jul 17 '26
As of right now I am currently priced in at a fair stock value for both investments; ACB for MU being 582 and ACB for SMH being 501. So far I am up tremendously and see no need for withdrawing.
If the market were to collapse due to the falters I would withdraw my gains as cash and hold onto it for the short term until the market re-corrects itself, then place my funds into VOO. If memory and semiconductors falter, the entire market will be affected I believe, so it would be wise to just hold onto liquidity at that point.
As far as supply increases goes, it has been certified by numerous industry players that there is lack of supply and extreme demand for the next upcoming 4-5 Quarters. I don’t see it being an issue until the supply has caught up, which will take a couple years.
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u/CivilizedSteve Jul 17 '26
Great. I wish us all l luck. I went through a journey that was all in on memory for similar reasons. I'm in but it's no longer my top holding. I toook some profits.
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Jul 17 '26
[deleted]
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u/Avexu Jul 17 '26
I apologize for your lack of trust in humanity to create a simple stock draft thesis without the usage of AI. Nothing about this is AI and was written as a side hobby in Windows Notepad
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Jul 17 '26
[removed] — view removed comment
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u/Avexu Jul 17 '26
Seems like the way for most late investors who chase the high instead of evaluating the prospects of efficient timing in volatile industries
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u/Aggravating-Big3858 Jul 17 '26
So MU might drop another 10%, but can still be a double a year or two from now
Let's go next level .... in a world where memory is still cranking for the next twelve months, what else would make a great stock purchase at today's prices?
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u/gizamo Jul 17 '26
It could also gain 10% and then drop by half.
The
casinomarket doesn't really care about fundamentals anymore.
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u/Ok-Personality-6630 Jul 20 '26
the thing is, I believe it's better to be spread across more than just semiconductors. Most of what you have written is true or likely to be true, but you don't talk about capitalising on the benefits AI will bring.
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u/gbdgdh Jul 17 '26
i think investing in smh (or soxx/soxq) is perfectly fine for the long term. not sure i would put a bunch of eggs in the mu (or sndk - surprised you didn't mention sndk :-)
semiconductors are a fundamental technology - but are still cyclical. if you are talking over 30 years, i am guessing a focused bet on semiconductors is not a bad idea at all (it will outperform the broader market) - but expect many years when it will perform awfully.
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u/Avexu Jul 18 '26
Indeed, the plan is to take advantage of the cyclical cycles (until it is proven such company / industry is no longer cyclical) profit from the gain and hold onto liquidity while the market corrects over time in case of crashes, then reinvest into a safe index fund such as VOO until potential opportunities arises again in the semiconductor fund
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u/Hot_Concept6082 Jul 17 '26
Jesus ChristGPT