You Can’t Eat Tokens

Since the war in Iran was effectively put on ice, the already overextended AI complex has gone parabolic.

Talks of bubbles or not bubbles has gone mainstream, with technologists, macro pseudointellectuals™️ and others telling us what they think is really happening....

Hint: It goes mostly like this 🔻

We’ve discussed Sorosian bubbles more than anyone – but one thing’s for sure, this cycle has benefitted the least skeptical, the most!

Market paradigms change every few years, and if your convictions just so happen to work now – you are golden.

NGMI = Not Gonna Make It

• Worrying about funding capex? NGMI.
• Worrying about the power required to electrify all those expected data centers? NGMI.
• Worrying about negative ROI on AI infrastructure? NGMI.
• Worrying about grift and lies? NGMI.
• Worrying about recent history and past lessons? NGMI.
• Worrying about expanding problems around the Persian Gulf and Hormuz? NGMI.

In the meantime, Iran still effectively controls the Strait of Hormuz.

But if you live in the US, you probably don’t think so. The Trump White House is engaging in very effective propaganda (charm offensive?) to make you believe that everything is OK.

And the stock market rally is probably helping...

Let's not forget the power of the wealth effect and how it's doing a lot of the heavy lifting.

All this while Crude inventories are being drawn down and Iran’s chokehold on the global economy is getting tighter... Playing the long game?

The point of Breakout however is to focus on technicals first — and then layer on a thesis or narrative (or vibes) considering one exists.

Let’s start with the AI trade with a focus on Semis and Memory.

But before we do, let's tell the story of this Korean woman who divorced her husband because the KOSPI was unde-pehfowming...

🇰🇷 Korean Stock Market (KOSPI) 🇰🇷
Since the tariff tantrum of April '25, the KOSPI is up ~3.5X in just a year. Constituents like Samsung Electronic and SK Hynix have led the pack, being dominant plays in the AI trade.

SK Hynix is up 12X and Samsung is up another 5X. The latter is South Korea's greatest chaebol (i.e. conglomerate) – imagine the wealth creation that has occurred in SK in the past year.

Also note it doesn't take many constituents to 10X, for a whole index to double or triple. The setup is similar to the Nasdaq and the S&P 500 where Big Tech/AI is rallying with no end in sight carrying the whole index to ATHs.

Roundhill Memory ETF: DRAM
Not much to see here. Since DRAM was launched, it has almost doubled within two monthly candlesticks. Perfectly timed and perfectly positioned to attract more inflows – which are then forcibly applied to buy even more memory stocks.. 👍

Advanced Micro Devices: AMD
Currently selling for 3/4 of a trillion dollars – AMD is up 6X in a year.

At first, AMD tied itself to the OpenAI train with a major deal to hand out 10% of its shares to OpenAI when and if they progressively carried out their part of the agreement to purchase GPUs from AMD. Touched on it here.

Now, AMD is rallying despite the OpenAI deal because AMD is a behemoth on its own – selling much needed CPUs. CPUs were recently "discovered" to be the next AI bottleneck, required for Agentic AI....

AMD is selling for >10X 2026 sales... Note: This is a semiconductor company. They used to be cyclical, but not many people still think so.

Regardless of the narrative, note the sharp reversal of ~65% in the stock whenever it peaks... 🔻

Intel: INTC
Last year, Intel had to be bailed out by the Federal Government. Today it's selling for $650bln and making parabolic new highs. For context, AMD is a fabless semiconductor company after it spun its manufacturing unit in 2009.

Intel however is a major player in fabrication plants – and this is why Apple has now gone back to Intel after dumping them a few years back. That event was a major blow to Intel; when Apple started designing its own processor (the M series). So the CPU trade plus Apple probably coming back and Intel is once again minting millionaires... Like the good old days!

Nvidia: NVDA
An 18X since the ChatGPT moment, NVDA is still the Semiconductor leader – by far. It hasn't gone parabolic like the rest, probably because it doesn't sell boring CPUs and because it's like $5 trillion in market cap.

NVDA is pushing ATHs once again and trying to breakout. Recently, xAI leased one whole Data Centre with 220,000 GPUs to Anthropic.. That means xAI was hoarding GPUs.

Maybe it was waiting for better days? Maybe Grok is already outside the battle? Maybe xAI is now a Neocloud?

Or maybe the early-stage phase of everyone buying GPUs from Nvidia and building Data Centres to the sky because of future compute needs is over?

And MAYBE that's why Nvidia became the Central Bank of this cycle – replacing the Fed in causing another bubble? Or boom/bust sequence, call it what you want...

...Because it doesn't matter what you call it – no one understands it anyway.

Memory Stocks

Micron Technology: MU
Parabolic since last year and even more parabolic since the Iran war went on ice. Hyperscalers were hoarding GPUs, now they are hoarding memory too. The new breed of AI models (called frontier models) – especially from US AI labs, are not only token guzzlers but memory guzzlers too.

This puts everyone in a position of being short memory.

The thing is, AI has found its killer app. And besides image generation which I use extensively and which works like a charm – that killer app is coding.

The Opus 4.7 model by Anthropic has a 1M token context window, and that needs a lot of memory. Maybe the market is looking out into the future and expecting models that need even more memory?

Maybe the market expects zero efficiency and zero churn to happen as the AI cycle progresses? I don't know – the narrative is now that the world is short memory.