Highlighting 4 potential risks for the boom in memory stocks and semis. Memory stocks are most exposed here.
**1. Efficiency Improvements:** If frontier models figure out how to run agentic AI with 80% less KV cache or memory overhead, the shortage disappears.
**2. China Supply**: If they successfully mass-produce High Bandwidth Memory or even flood the mid-range market, the Western companies lose pricing power.
**3. Companies Scale back on AI Spend**: Cost of running AI at companies is exploding. As of now, AI first is more expensive than the old human + SAAS stack.
**4. Construction Delays and Grid Constraints**: Physical construction and grid/regulatory problems are already causing delays.
I'm not saying this will happen, but all of the above are at least somewhat likely to happen and would have a massive impact on demand or supply. Be careful out there.