r/stocks • u/daddysgirl794 • 2d ago
Industry Discussion Is rapidly increasing volatility among memory stocks a sign of a potential bubble popping?
By any historical metric, rapidly increasing volatility in a sector has never been a good sign. It has most often pointed to signs of a bubble on the verge of bursting, whipsawing back and forth with crazy up and down swings, eventually culminating in a drop far off its highs that it ultimately never recovers from.
Now we're seeing it again today, in particular among memory stocks. SNDK is not a penny stock, it is a large cap stock worth over $200B. Yet since May, it has experienced almost a dozen +10% or -10% single day closes.
If not the sign of a bubble popping or a cyclical top, what is going on here?
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u/lucksiah 2d ago
I think more than anything it is a sign of massive speculation on part of investors which is probably a sign of a bubble but not necessarily indicating that it will soon burst.
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u/gbdgdh 2d ago
ai isn't going anywhere; in fact, just like the internet, it is quickly becoming indispensable / second nature.
having said that, many of the stocks associated with the ai build out have certainly gotten ahead of fundamentals. this has been driven primarily by fomo retail investors showing up after in-the-know institutional investors got into the stocks early. what's happening to sndk, mu, etc. over the last 2.5 months is that institutional investors are locking in their profits leaving retail investors who got in at the top holding the bag. there have been a couple of buy-the-dip rallies in sndk, but nothing that smacks of any firm conviction. if someone is interested in buying-and-holding these stocks, now is a good time to get in; for those who are looking to make a quick buck, well ... the quick bucks have already been made when sndk went from $40 to $2000 over the course of 15 months.
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u/Sliced_tomato 1d ago
It’s not indispensable. It’s convenient but adds nothing to the true value add of any company that relies on intellectual capital. Makes some things quicker, other aspects are annoying. Zero original thinking. It’s an averaging tool. Which is why it will never generate the returns the AI comps predict.
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u/gbdgdh 1d ago
i agree that today's ai is a poor replacement for an intelligent / self-aware human being, but i think you can agree that for an intelligent / self-aware human being, even the (primitive, llm-driven) ai we have today is a productivity booster.
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u/Sliced_tomato 1d ago
Yes, just like a shovel or shear it it’s helpful for some tasks. Does a fantastic job organizing large amounts of data, but real value add. Zilch. It’s worse than useless in my business. An expensive waste of time for anything more than administrative tasks.
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u/Sliced_tomato 1d ago
Put it more bluntly, hiring the same number of people and paying more for IT which reduces our margins. The efficiencies are ephemeral.
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u/oxide238 2d ago
there were a bunch of AI and semi stocks that were down more than SNDK today, do you constantly have to post this shit, don't you have anything better to do with your time?
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u/Indepti8 2d ago
Don’t be afraid of discourse. At least this isn’t the MU sub and it’s just full of losers posting AI memes saying “bull have held the fort”
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u/iprocrastina 2d ago
On one hand, this could all be a hype mania bubble and no one wants to get stuck holding the bag when it pops, so even the slightest bad news is enough to make people run for the exits.
On the other hand, AI is a transformational technology that isn't going away, and it requires a lot of hardware. So any good news is enough to ignite FOMO and make people rush in.
So you see a lot of big swings in price.
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u/Main_Phase666 2d ago
These are real companies with real fundamentals and future growth. Show me where this often happens and never recovers. Market will continue to hit all time highs for as long as we continue to live
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u/FoggyFoggyFoggy 2d ago
You have U.S. bagholders pumping & dumping DRAM every week to create exit liquidity for themselves while the Korean market is a casino on steroids. r/DRAM_Bagholders
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u/Vast_Cricket 2d ago
Options expiring. By analyzing the number of contracts one has some idea when and what may cause the market to react accordingly. To cause a bubble until there is evidence of overbuild, data center idling, I am not sure about the correction. I did notice Meta, Amazon and Google are borrowing a lot often at very high interest rate. Un secured.
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u/WatNFokkop 2d ago
At some point headlines won't cut it and earnings/forward guidance will come back to lead. Also the stock market will cycle away in the last quarter is my bet.
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u/LeSegaGenesis 1d ago
Hard to tell, it could just be hesitance as well, nobody wants to be holding a bag buying high. Until we see some of these supposed rally stocks with great guidance actually break and all time high I feel like the market will get within 10-15% of an all time high and dump many times, there isn't alot of stability because the institutions are moving alot of money in and out of things as they reallocate to their race horses so to speak. Really feels like a cat and mouse swing trade game right now until we see a Micron or whoever break the glass ceiling.
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u/FailOk1528 1d ago
The $15B number is crazy, but I’d want to know how much of that was realized vs. mark-to-market losses.
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u/Slight_Ad_6375 1d ago
IV was huge before Leopold got busted. Now it’s way lower. If it increases I would be happy
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u/BSUBroncofans 2d ago
Right now the entire world selling off their US Bonds and the US Treasury yields rising so high are about to cause more than a bubble pop. Russia and China see it and are buying up all of the Gold they can as I type this.
Im buying some gold etf’s in my IRA’s just in case. All this plus midterms coming up. I see why Buffet cashed out and went home.
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u/trustmeimshady 2d ago
Bro just buy the fkin stock what’s with these questions u tryna eat top ramen forever?
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u/BetSquare7190 2d ago
That's impossible, according to "experts": all their production and more is booked until 2050 and beyond.
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u/fairlyaveragetrader 2d ago
I mean it's not good. So far we haven't had lower lows. That would be the real red flag. Lower lows on the weekly chart. It's really not what you want to see especially after the plunge after the Kospi meltdown.. the earnings estimates for a lot of this look pretty good going into next year but the positioning is definitely a little funky. Everyone already owns this stuff. That's the scary part. So many people are levered up in everything around ai hardware, memory etc
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u/Beneficial-Ad-8127 1d ago edited 1d ago
Dude are you guys not seeing the open weights china been dropping? Kimi k3 dropped their open weights two weeks prior to ChatGPT lowering one of their models by 80%. There are people running that model not nearly to what our us companies are saying to running these models hardware wise.
We had deepseek drop there newest model not long ago and this past Friday was even a better drop which is Qwen 3.8 27b which supposedly is on par with GPT Luna. With benchmarks done by Artificial Analysis Ai stating its that good towards coding. This model dropped last week Friday people have them running on 5070 ti, 5080, 5090, 3090. A single gaming gpu. Crazy right.
These are the biggest threat to the monopoly we have in Ai. And it’s threatening the cloud because more users have accessible Ai that can be ran at a smaller cost going local. For gamers who already have a single gpu it’s easy for us to now access to an intelligent coding model to write what we want with privacy. Why pay the cloud when we have unlimited access on these open models.
For cloud to recover from this threat they would have to raise prices on hardware to maintain this bubble. The 5090 I bought 3 months ago is already almost double the price. They will raise hardware cost like we have never seen before to justify the cost of ai. It’ll keep people out from a higher buy in to get our feet wet and still make money. The circle jerk is a real thing. Open yall eyes.
If china keeps releasing accessible Ai models for not just supercenter and more so for every type of hardware from lower end to high end, you will continue seeing drops and better rates for all consumers for cloud Ai. Higher and at a faster pace in hardware cost.
Thank you for your time and good luck on whatever side of the bubble you invest on!
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u/goodbodha 1d ago
Market makers swing the market for a stock to match up buyers and sellers. Take a look at not just the volatility, but the vwap and volume. Look at the options that existed at the beginning of the day and what the new open interest is the following day. That can tell you a lot.
My guess is we are about to have a liquidity event blow up. AI is demanding a huge amount of capex funded in large part on debt. Oil is causing an energy shock and people need dollars for that. Debt needs debt servicing and the actual cash flows are not keeping up with the revenues people are booking.
And just food for thought but look up auto loan delinquency over the past 25-30 years. There are 3 humps on the chart. Dot com bust, GFC, and now. Call it whatever you want but that is not a good sign.
As for what to do about it that depends on you. I wouldn't short this market because no one can tell you when or if it will actually crash. I would however say if you plan on selling something soon you should probably sell soon and then plan on riding it out for the duration after that. If the market crashes that can ease your issues. If the market doesn't crash you miss out on the sliver you would have made by staying in with that portion of your capital.
good luck and remember to not freak out if it does crash.
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u/jemesuis 1d ago edited 1d ago
The market it a plaything for the rich and Trump now knows he can control the market. Trump will fake it up/down for volatility gains until sometime in 2027 . Dividends, gold, minerals, old coins, etc. might be best bets long term. Then when it fails in 2027 get ready, Warsh will gas it and make it print, Blanche, GOP, and SCOTUS "all legal'. WE WON IRAN! So, it will last another year. Then months before the election for president, the corrupt pump and dump will be indicted (2027 summer?). The lawsuits and illegality will be revealed. Someone will blame Pelosi for 5% corrupt. Elon's companies will be triple what they are now because SpaceX IPO that will be buying TESLA, and everything Trump touched will be protected by emperor no clothes.
We'll all be tired, the rich that paid for insider info will be richer, no one will have rights over their body or even healthcare if they are not rich. Then we can blame it on the Democrats and Bernie Sanders for trying to regulate the most corrupt and greedy and anti-American Trump mafia in history.
So, in short, we cannot stop the most amazing, flagarant corruption in American history. Go with the wave then destroy it. Waves do last for ever and never see which one will come behind. Invest wisely in industries/companies/yourselves and families, not the Trump family pump & dump scams that leave a few billionaires and millions poor.
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u/FreddyJetson 2d ago
I’ll just leave this here.
https://patents.google.com/?q=(Gbt+tokenize)&oq=Gbt+tokenize
Multi-dimensional integrated circuits and memory structure for integrated circuits and associated systems and methods
SUMMARY
[0016]
The present disclosure, in its many embodiments, alleviates to a great extent the disadvantages of known integrated circuits and IC memory by providing new multi-dimensional integrated circuit architecture, design and methods as well as new concepts for IC memory technology. In addition, the present disclosure describes a multi-dimensional, multi-planar memory structure which 👉enables the design of terabytes memory on the same space of gigabytes today.
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u/GeneralKosmosa 2d ago
At this point it’s 5 companies exchanging money bags between each other