The semi selloff is a transfer of margins, not a death spiral. Expanding global supply (China/Japan/Korea capacity + ASML shipping more to memory makers) will compress chip-maker margins. But cheaper hardware is fuel for the AI hyperscalers. Bullish AMZN, GOOGL,MSFT, ORCL.

Following the +25% guidance have accelerated the near-term calculus for $MU. Our upcoming Inside500 update will likely lift our forensic valuation by ~25% (into 800 range), factoring in an aggregate cycle revenue peak nearing $400B. Front-loaded CapEx growth, including deep structural investments in ASML EUV infrastructure for advanced greenfield fab sites will establish a high-volume runway post-2029. While unit capacity scales into 2030+, we model a long-term normalization of margins, cementing FY27–FY28 as the cycle peak for revenue. Crucially, Micron is the last of the Big Three to integrate EUV into its high-volume manufacturing roadmap. This means its active baseline fleet is significantly smaller than Samsung’s and SK hynix’s, creating a massive, high-leverage catch-up window as they scale advanced nodes. Full report incoming

ASML Memory Allocation: Driven by the AI infrastructure boom, the historical logic-dominated equipment mix has completely flipped. Memory-related systems accounted for 51% of ASML's system sales in Q1 2026 (up from just 30% in Q4 2025). Furthermore, South Korea (home to Samsung and SK Hynix) ballooned to 45% of ASML’s total regional revenue. The Implication: Because SK Hynix holds a massive volume of EUV tools, they have significantly higher total capacity headroom. They are pulling forward their HBM4E sample timeline to mid-2026. While Micron may match them on raw performance and power efficiency metrics per chip, SK Hynix can simply flood the market with higher overall bit volume.

Putting aside politics - The concept of Reflexivity, popularized by George Soros, is the ultimate "cheat code" in market mechanics and made Soros one of the greatest investors of all time ( Druckenmiller - a market wizard and Treasury Secretary Bessent worked for Soros) . It suggests that instead of the market reflecting reality, the market often creates it. The key is understanding when prices change reality. Here is a simple example of how this played out with AMC: The "Soros Reflexivity" Loop: How AMC Defied Gravity In a "rational" market, the stock price follows the company. However, in a Reflexive market, the company follows the stock price. Here is how the $AMC meme craze turned a "dead" company into a liquid one. 1) The Cognitive Function (Perception) Markets aren't mirrors; they are feedback loops. In early 2021, the "Perception" of AMC shifted. Retail investors didn’t care about the $5B+ debt or closed theaters. They saw a "Short Squeeze" opportunity. Sentiment turned 180°. 2) The Price-Reality Gap As investors piled in, the stock price disconnected from the "Fundamental Reality" (which was near-bankruptcy). Old Reality: AMC is insolvent. New Perception: AMC is a moonshot. Result: The stock price rockets. 3) The Reflexive Pivot (The "Magic" Trick) This is where Soros’s theory gets wild. AMC management saw the inflated stock price and realized they could use it to change their reality. They issued millions of new shares at these "irrational" prices. 4) Reality Follows Perception By selling expensive shares to eager buyers, AMC raised billions in real cash. They paid down debt. They pushed back bankruptcy dates. They upgraded theaters. The "fake" stock price ended up saving the "real" company. 5) The Loop Closes Because the company now had cash and less debt, the "fundamental" value actually improved. The investors who bought the "hype" ended up creating the very solvency they were betting on. The takeaway: When enough people believe a stock is worth more, they provide the capital that makes it worth more. Price isn’t just a scoreboard; it’s a catalyst. #Finance #Markets #AMC #Reflexivity #Investing

April we saw (1) rebalances end , (2) deep negative gamma reverse , (3) bonds and credit markets improve liquidity and (4) earnings as a whole were very good = results SP500 up 10+%. I'm working on finishing this month's update, but I wanted earning in before I finish. Watch gamma levels chasing market up (but moving up fast-warning sign), and bonds for short term "plumbing" issues. $NVDA earnings coming up May 20th I think. After (1) NVDA earnings, (2) China meeting and (3) Iran deal becomes official table is cleared for market (and Trump) to focus on midterm elections and new Fed. The market may soon consider the pros and cons of democratically controlled congress and impact on (1) energy policy, (2) AI regulation and (2) deficit spending. As always keep a watching bonds together with earnings which decide long-term value of the SP500 . Short-term momentum determined by liquidity from the 600 trillion dollar derivatives market and related market structure plumbing that moves liquidity (which is now "the tail that wags the dog" - in the short term). In sum, don't take large short-term moves in the SP500 to have any fundamental meaning no mater what. @CNBC or @Bloomberg "experts" tells you.

Stop looking for "meaning" in short-term S&P 500 swings. The market wizard Stanley Druckenmiller recently highlighted that price action/volume analysis is ~80% less effective now than in decades past. Why? First, the $600 trillion derivatives market and complex liquidity "plumbing" now dictate short-term moves. Fundamentals haven't changed; the market structure has. Liquidity isn't just following the market—it’s the tail wagging the dog. Second, every quant, trend and system uses momentum as a fundamental signal and volatility as a risk factor. Read more about this in our past April 2nd monthly letter - xitter.cf/Inside500Index/status/… We welcome your thoughts on this market structure issue...

Earnings from cloud services are very impressive, Capex well spent

$AMZN and $GOOGL are acting like Sovereign Utilities , $TSLA will join them when AI progresses through "level 3 AI" of the @LatticeJournal Frontier AI Hierarchy .

Interesting working paper " Frontier AI Hierarchy" from @LatticeJournal. We will combine this model and update our Industrialization of Intelligence sowing $AMZN , $GOOGL , $TSLA are Sovereign Utilities. xitter.cf/LatticeJournal/status/…

so true, impact won't be a single technology event like the internet. Interesting Article here - "he Velocity of Silicon vs. The Inertia of Steel" xitter.cf/LatticeJournal/status/…