The major storage stocks are all dropping together, you can tell the emotional premium in the market isn’t small. Actually, the high profits in the storage industry can still last for a few more quarters. The reasons for the decline are still the same old story. One is that AI data centers are increasingly relying on borrowed money and supplier guarantees, and the other is the expansion of storage production capacity in China. Micron ($MU) is unlikely to face significant pressure from China in the short term. It’s still at a high profitability point, but the fastest growth phase is nearing its end. SK Hynix and NVIDIA are tied to AI infrastructure, so their fundamentals depend on the AI industry’s performance. Another part of their premium comes from the demand for high-end memory. SanDisk ($SNDK) has always had a disconnect between its profits and stock price. It serves data centers and traditional markets, and even when its earnings reports look good and profits are solid, its stock often drops. Western Digital ($WDC) mainly focuses on mechanical hard drives. The increase in China’s production capacity for standard memory and flash memory won’t directly boost the supply of high-capacity mechanical hard drives, so the impact is minimal. Retail investors looking to bottom-fish are the most active here. The biggest impact is on SanDisk, which probably won’t be able to sustain its current market value after a few more quarters. Micron and SK Hynix can still enjoy the benefits of high-end memory shortages for a while longer. Of course, it’s still too early to talk about a bubble bursting.