Weekend lookback · Sat, Jun 13
The chips that store data just got their moment, and it is not a fluke
Memory and storage stocks are leading the entire AI trade today. When the picks-and-shovels layer of AI gets this loud, something structural is shifting underneath the hype.
Today's biggest story is not the SpaceX IPO. It is what is quietly moving in the market underneath it.
Memory and semi equipment, meaning the companies that make the chips that store data and the tools used to manufacture all chips, is the best-performing theme today at +3.78%. For the week it is up +3.36%. $STX (Seagate, a hard-drive and storage company) is up +7.25% today. $WDC (Western Digital, same business) is up +6.35%. $KLAC (KLA Corporation, a chip manufacturing inspection tool company) is up +5.55% on the day.
Here is what is really going on. A $130 billion backlog of data center projects is currently blocked by permitting protests. That is physical capacity that cannot be built yet. So the money that would chase new construction is rotating into the storage and equipment layer instead, the part of the supply chain that gets paid regardless of which data center wins.
Coatue (Philippe Laffont's $40B+ tech hedge fund) already owns $AVGO at 5.9% of its portfolio. The smart money is not waiting for the construction logjam to clear. They own the layer underneath it.
If the data center buildout is real, memory and equipment are the floor. If it stalls, they are still the floor.
*When the construction layer is blocked, the picks-and-shovels trade does not pause, it reprices upward.*