Episode summary
Memory Chip Frenzy Sends SK Hynix, Micron Intro $1 Trillion Club | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Alexandra Semenova · Guests: Jake Silverman, Sid Philip, Mary Ross Gilbert, Lindsay Dutch
Summary
Semiconductor stocks are surging on the view that the AI boom has turned memory into a structural growth story rather than a purely cyclical one. Bloomberg Intelligence’s Jake Silverman argued that Micron Technology and other memory makers deserve a higher valuation multiple because earnings are real, capacity is tight, and long-term agreements could make returns more durable over the next 3 to 5 years. He said investors are betting that the market can move beyond roughly 10x forward earnings toward 15x or more if the re-rating sticks.
Silverman also said the broader SOX rally is backed by actual earnings growth, not just speculation, though some names are more stretched than others. He pointed to Broadcom, Marvell, and AMD as the most visible challengers to Nvidia, while stressing that Nvidia remains hard to bet against because it keeps adapting.
The episode also covered Boeing, where FAA approval to raise 737 Max production was framed as a crucial step toward stronger cash generation and debt reduction. On retail, Abercrombie & Fitch beat expectations despite weaker comps, Dick’s Sporting Goods posted a strong quarter with 6% same-store sales growth, and Bath & Body Works remained under pressure, highlighting the split between higher-income and lower-income consumers.
Key takeaways
- Jake Silverman said the memory-chip rally reflects a possible structural change, not just a cyclical upturn, and investors are betting on a higher multiple for Micron and peers.
- Silverman said SOX earnings are "real" and the sector’s forward P/E gap versus the S&P 500 is smaller than at prior peaks.
- The Boeing segment said FAA approval to lift 737 Max output should help cash flow, debt repayment, and a turn toward more profitable operations.
- Abercrombie & Fitch held full-year guidance even with 1% down comps, helped by strong UK sales, Sperry collaboration sell-through, and pricing power.
- Dick’s Sporting Goods posted 6% same-store sales growth, while Bath & Body Works remained weak, reinforcing the split between higher- and lower-income consumers.
Notable quotes
“the earnings are very real, right? And so, it's it's not like the SOX is just seeing tons and tons of multiple expansion purely out of speculation”
“we're in a particularly strong up cycle”
“ramping up 737 Max production has been the key target since the FAA capped production back in 2024”
How the episode opens
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Let's get back to tech stocks. Uh semiconductor stocks in particular, they are just ripping. Uh I mean, we've got million uh trillion-dollar market caps for Micron Technology.
What's going on out there? I mean, there are not enough chips, I guess. I don't know.
Let's turn to somebody who knows what's going on out there. Jake Silverman, semiconductor analyst for Bloomberg Intelligence. Uh he joins us here in studio.
Jake, what's going on with your world here today? Why are there not enough chips?
Yeah. — Just make more chips. — Wish it was so simple. — Uh but then they wouldn't be getting those price increases.
Um yeah, so really I think I guess focusing on the valuation. Um we're in a particularly strong up cycle. Um I think the argument around why the stock should be worth a trillion dollars is that Micron and the other memory makers are no longer really in a cyclical situation.
Um it's possible what we're seeing is a structural change in the memory market where it may be more the earnings may be more sustainable through the cycle over than at least the next 3 to 5 years. And so if you argue in that if you argue that, what you're arguing for is that um maybe the valuation multiple has to expand beyond what we're seeing today. I mean, we're already at around 10x, I guess a little bit below that, I think, uh forward earnings.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- memory chips rally
- ai demand for semiconductors
- boeing 737 max production
- retail earnings
- back-to-school retail outlook
Companies and tickers mentioned
- MU
- BA
- ANF
- DKS
- BBWI
- SK Hynix
- Micron Technology
- Boeing
- Abercrombie & Fitch
- Dick's Sporting Goods
- Bath & Body Works
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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