Good morning, memory hoarders!

A $25,000 investment in SanDisk one year ago would be worth roughly $1 million today.

Today, we’re breaking down why one of tech’s most boring businesses is exploding, and why this AI bottleneck may not stop soon.

Memory stocks have gone absolutely insane.

SanDisk, Micron, and Samsung are all going higher and higher.

The reason is simple: AI is using up memory faster than companies can make it.

Memory now represents around 50% of the cost inside advanced AI chips, up from roughly 35% in earlier chips.

And future AI chips may need 2x, 3x, or even 4x more memory to hold more information while they work.

This shortage is already showing up outside data centers.

For the first time ever, the PlayStation 5 now costs more than it did years after launch.

Consumer electronics usually get cheaper over time, not more expensive.

But AI is changing the math.

Data centers are now competing with phones, PCs, consoles, and servers for the same memory supply.

And that supply is controlled by just three major players:

They sit between the AI boom and the memory needed to power it.

Normally, this would look like a classic bubble.

Prices rise → Companies overbuild → Prices crash

But that cycle only works when supply can catch up quickly.

Right now, it can’t.

Advanced memory requires specialized factories, expensive equipment, precise materials, and years of planning.

Customers are so desperate for memory that some are paying up to 40% upfront to help fund new factories before the chips are even delivered.

That is why the top memory manufacturers’ supply is already booked through the end of 2027, with companies like Google, Nvidia, and Meta paying early to reserve future capacity.

So while the stocks may cool off after a move this violent, the actual supply problem may not.

The bottleneck itself could take years to clear.

As we said in our previous issue: AI demand moves at software speed. Memory supply moves at factory speed.

When AI demand grows faster than factories can respond, the bottleneck does not stay inside data centers.

It shows up in prices, products, and supply chains.

(Reply “MEMORY” to this email and we’ll send you what we think is the cleanest exposure play to this memory crisis.)