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💾 Memory rush
Good morning. The free return party is getting a cover charge. Sending something back now costs retailers an average of 27% (opens in a new tab) of the purchase price, pushing more of them to rethink how easy they make it. Fees are creeping in, return windows are getting tighter, and the days of buying without thinking twice are fading fast. In this economy, even buyer’s remorse has a price tag.
Top Idea
Memory Stocks Are Back At The Center Of The AI Trade
Memory chips are done playing second fiddle. AI data centers are swallowing more storage and bandwidth with every expansion, putting a premium on hardware. That shift is lifting prices and profits, but tying the rally closer to hyperscaler spending.
Demand shock: Memory is taking a much larger cut of the semiconductor market as AI changes where chip spending goes. Susquehanna analyst Mehdi Hosseini says the category now accounts for 50% to 55% of industry revenue, compared with 20% to 30% historically. That puts Micron Technology, SanDisk, Western Digital, and Seagate Technology in a stronger position as semiconductor revenue heads toward $1.5T (opens in a new tab) in 2026.
- Susquehanna expects DRAM prices to rise 50% sequentially this quarter, with NAND prices climbing 60% over the same period.
- UBS lifted its 2027 blended HBM price-growth forecast to roughly 79% year over year, up from its prior 67% estimate.
Can the Trade’s Durability Hold?
Memory stocks are trying to outrun their boom-bust reputation. CNBC contributor Todd Gordon points to the DRAM ETF pressing its summer highs (opens in a new tab), while its performance against the S&P 500 and broader semiconductor holdings has turned higher. Investors are betting that stronger earnings can last longer this time, yet valuations still show how much skepticism remains from past cycles.
- Micron recently traded at 6.5x (opens in a new tab) expected next-12-month earnings, making it one of the Nasdaq 100’s cheapest tech stocks despite the stronger outlook.
- SanDisk traded near 8.3x forward earnings even as Gordon cited next-12-month EPS of $214.10, leaving a wide gap between profit growth and valuation.
Cycle breaker: The old volatility has not disappeared. Bloomberg reported that SanDisk and Western Digital recently fell more than 30% from their peaks, while Micron and Seagate dropped ~20%. MoneyFlows’ Alec Young sees those pullbacks as a warning that “the smart money is moving on,” while Zacks strategist Brian Mulberry argues the selloff clashes with fundamentals he calls “absolutely spectacular.” The chips have changed, but Wall Street still needs convincing that the cycle has too.
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Large-Cap Recap
NFL Season Puts Traditional Sportsbooks on Edge
Prediction markets are capturing massive sports volume and threatening traditional platforms. DraftKings and Flutter Entertainment face rising competition as prediction platforms unlock restricted states like California and Texas. Meanwhile, traditional sportsbooks continue dealing with declining ad impressions. While the NFL has barred prediction platforms from broadcasting, regulatory battles will ultimately determine nationwide access. Both companies are developing rival products to protect their core operations. [Read (opens in a new tab)]
Everything Apple Unveiled at Its Latest Event
Apple gave its hardware lineup a major reset at its latest product event. The company unveiled its first foldable iPhone, raised prices on the Pro lineup, and introduced new AirPods and Watches. AI ran through much of the launch, with Siri reaching further into apps and across devices. The iPhone Duo adds another premium category, while Apple’s existing hardware gives its AI features a direct route to customers throughout the day. [Read (opens in a new tab)]
Anthropic IPO Puts AI Economics Under Public Scrutiny
Anthropic is preparing for an IPO that could put one of AI’s biggest bets in front of public investors. Claude is growing fast, but keeping it running requires enormous spending on computing power and data centers supplied by partners including Amazon and Alphabet. With margins still trailing traditional software, the filing will give Wall Street its clearest look yet at whether Anthropic can turn that growth into a profitable business. [Read (opens in a new tab)]
Market Pulse
Casey's General Stores, Inc.
CASYThe convenience-store chain’s shares sank despite beating earnings estimates as weaker-than-expected same-store sales growth overshadowed the strong quarter.
Cloudflare, Inc.
NETThe cloud security company’s shares surged after unveiling an AI security service with OpenAI designed to find vulnerabilities, block attacks and generate fixes automatically.
Meta Platforms, Inc.
METAThe social media giant’s shares jumped as Wall Street analysts cheered its new Muse AI assistant and saw another major product cycle taking shape.
Markets & Economy
Treasury triples long-dated bond buyback: The US Treasury will purchase up to $6B of 10- to 20-year bonds after a selloff pushed long-term yields sharply higher. The operation targets older, less-liquid debt as officials try to support Treasury market liquidity. [Read (opens in a new tab)]
Oil surge hits US consumers harder: Goldman Sachs says Brent could top $120 as Middle East attacks threaten supply. Americans have already absorbed ~$100B in higher fuel costs since the Iran war began. [Read (opens in a new tab)]
Borrowers turn to riskier mortgages as rates climb: Adjustable-rate loans rose to 8.5% of mortgage applications as 30-year fixed rates reached 6.85%. Lower initial ARM rates are attracting borrowers seeking relief, while overall mortgage demand continues to weaken. [Read (opens in a new tab)]
Business & Tech
Chewy raises outlook as essentials drive growth: Chewy lifted its full-year sales forecast after second-quarter revenue reached $3.33B. While everyday food and vet care remain strong, discretionary spending on treats and pet accessories continues to face pressure. [Read (opens in a new tab)]
Jersey Mike's logs higher sales and traffic: Jersey Mike’s Subs reported fiscal second-quarter revenue rose 10%, driven by customer traffic rather than price increases. Digital sales climbed to 43% of systemwide sales as the chain added 83 new locations. [Read (opens in a new tab)]
Signet raises annual outlook following profitable quarter: Signet Jewelers lifted its fiscal 2027 earnings forecast after swinging to a $52.1M profit in Q2. Higher-end buyers and a long-term credit deal with Bread Financial helped drive the turnaround. [Read (opens in a new tab)]
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Digit of the Day
Hollywood’s $4.76B Summer Comeback Has A Blockbuster Problem
Movie theaters finally got their blockbuster ending. Domestic summer ticket sales hit $4.76B (opens in a new tab) from May 1 through Labor Day, breaking the 2013 record before inflation and marking a major comeback for theaters. Spider-Man, The Odyssey, Toy Story 5, and a wave of horror hits turned summer into Hollywood’s biggest post-pandemic victory lap.
- Summer revenue rose nearly 30% (opens in a new tab) from 2025, while 322.8M tickets sold marked a 22.6% attendance jump, according to EntTelligence.
- “Obsession” crossed $500M (opens in a new tab) worldwide on a sub-$1M budget, while “Backrooms” reached $394.1M worldwide on $10M.
Popcorn math: Despite the summer success, the comeback still leans heavily on a handful of monster releases. Analysts cited by the Los Angeles Times expect the 2026 domestic box office to clear $10B for the first time since before the pandemic, with more than $7.3B already in the bank. The next big test comes Dec. 18, when Dune: Part Three and Avengers: Doomsday go head-to-head.
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