【Bull Bull Almanac】Did MU sell off after breaking its record high? What to do if you chased it at a high price? NVIDIA hits another all-time high—where will capital flow next?

Guest of this episode: Sun Zidahu – Financial Columnist

The Five-Layer AI Stack: Where Is the Money Flowing?

US equities continue their strong rally, repeatedly hitting new highs, with trading sentiment clearly heating up. According to data released by Futu, US stock trading volume surged 36% month-over-month, and order volume reached a new high since 2022. Star tech stocks remain the main drivers of the rally, with massive capital flowing into the AI supply chain. Yet AI spans such a broad scope—when exactly is the money flowing, and where is it parking?

$NVIDIA (NVDA.US)$ NVIDIA CEO Jensen Huang once proposed that AI is essentially a 'five-layer cake,' with each layer interconnected from bottom to top:

Layer 1: Energy (the crust)—Without power supply, nothing else matters. Relevant stocks include $Oklo Inc (OKLO.US)$ 、 $Bloom Energy (BE.US)$Wait.

Layer 2: Chips (the filling)—Processors that convert electricity into computing power; $Taiwan Semiconductor (TSM.US)$ 、 $NVIDIA (NVDA.US)$ is a representative example.

Layer 3: Infrastructure—Includes not only servers but also land, power delivery, cooling systems, construction, and networking—an integrated 'AI factory'.

Layer 4: Model Layer—The core output of the AI factory. AI models can understand various types of information—from language and biology to physics simulations—and continuously learn; large language models are a prime example.

Layer 5: Application Layer (the topping)Areas that create economic value—such as autonomous driving and robotics—are all AI enablers, integrating AI into everyday life.

This is AI's five-layer structure: energy → chips → infrastructure → models → applications, with each layer tightly linked to the next, and capital continuously flowing through the industrial chain.

Memory stocks have all hit record highs—how much longer can this super cycle last?

Recently, memory stocks have been heavily favored by capital, with leading companies from China, the U.S., and South Korea all reaching new highs. From the beginning of the year to May, some stocks surged 300% to 400%, and even ETFs have benefited.

How much longer will the upcycle in the memory chip industry last? Experts note that most industry participants highlight one key point: the current tight supply in the memory market may not ease until the second half of 2027 or even 2028. Since equity markets typically price in real-economy trends about six months in advance, this rally could extend at least until the end of 2026, possibly into early 2027.

However, there’s a risk worth considering: will the Federal Reserve raise interest rates? Currently, most major AI companies rely heavily on financing. If the Fed were to hike rates later, it would impact these companies’ ability to raise capital. Should revenues start deteriorating, firms might slow down AI infrastructure investments, significantly accelerating the end of this market cycle.

Sunzi Institutional Investor: Micron and SanDisk still aren’t overvalued

Assuming global economic risks are temporarily set aside and the economy remains very strong, experts recommend continuing to monitor $Micron Technology (MU.US)$ and $SanDisk (SNDK.US)$ these individual stocks. Judging by Micron’s valuation, compared to NVIDIA and the strongly rallying $Intel (INTC.US)$ , or even the laggards $Qualcomm (QCOM.US)$ Micron's valuation isn't actually that expensive.

There are also related stocks available in the Hong Kong market, such as $MONTAGE TECH (06809.HK)$as well as$KINGSOFT CLOUD (03896.HK)$ , which investors can monitor according to their own needs.

Practical Tips for Buying at High Levels: Use Moving Averages Effectively

Regarding memory stocks that have already risen significantly, experts shared a technical chart-based trading strategy:

Holders— Monitor the 10-day moving average; if the stock price has never broken below this support line, use this level to progressively raise your take-profit target.

For those not yet holding positions— Look for buying opportunities near the 10-day moving average, and set a stop-loss reference approximately 2% below that level.

Warning Signal Identification— Suppose the stock price is currently rising along the 5-day moving average. If it suddenly accelerates upward, creating a gap of 15% or more between the price and the 5-day moving average—forming a classic parabolic rise—and accompanied by a surge in volume, followed by narrowing daily price ranges of only 3%–4% over the next two to three days without a significant drop in trading volume, and then a bearish candle appears the following day with a decline of 5% or more, this constitutes a classic topping warning signal. Investors should be cautious, as the stock price may be poised for a pullback.

Which sector will benefit next? PCB and optical communications deserve attention

Considering the possibility of sector rotation, experts believe the following sectors could be next in line:

– Printed Circuit Board (PCB) concept stocks— This theme hasn’t been heavily traded for a long time. In the Hong Kong market, there’s Kingboard Group (0148.HK), and Shenghong Technology (2476.HK), which recently listed and is the only PCB industry leader in the Hong Kong stock market.

– Optical communications and optical modules— Benefiting from AI infrastructure demand for high-speed data transmission.

– Packaging and testing— On the U.S. market, watch Amkor (AMKR). Due to higher-than-usual defect rates in newly manufactured chips, demand for testing services is expected to rise significantly.

– Hong Kong-listed industrial-related stocksandU.S.-listed power-related stocksThis sector is also worth watching.

Use ETFs to diversify exposure and capture opportunities across the entire industry chain.

If you're looking to enter the market but have limited capital, ETFs could be a great option. For U.S. stocks, there's $Roundhill Memory ETF (DRAM.US)$ , which focuses on global memory semiconductors; for Hong Kong-listed stocks, there's $EFund A SEMICON ETF (03486.HK)$ , which tracks the Asia Semiconductor Index. By diversifying through ETFs, you won’t miss out on market beta while capturing growth opportunities across the entire semiconductor supply chain.

Open the NiuNiu app, go to 'Market' → 'ETFs' → 'Thematic ETFs' → 'Semiconductor ETFs' to easily select and invest in your preferred semiconductor-related ETFs.

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