I think the epic mistake was made by investors and executives who bought tales about imminent super-intelligence about to displace millions of knowledge workers from entire industries replacing them with AI datacentres.

These people are the main reason why AI companies have unlimited funding, and can afford to buy global RAM supply for years in the future despite their expenses exceed revenue by billions.

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amelius 4 hours ago | parent | next [-]

The main tool to fix this is to forbid companies to sell below cost price. It is part of antitrust law.

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benced 3 hours ago | parent | prev | next [-]

You can short them and make a lot of money (to buy RAM with?) if you feel this way and are correct.

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BLKNSLVR 3 hours ago | parent | next [-]

Not having the money to buy a new computer often means not having the money to put where ones mouth is.

Can't afford thing? Gamble on stock market instead.

Ridiculous argument that already rich people make.

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demibabs 3 hours ago | parent | prev | next [-]

No?

Shorting doesn’t only require you to be right. It requires perfectly timing when the market will realize you’re right.

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3 hours ago | parent | next [-]

[deleted]

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dist-epoch 3 hours ago | parent | prev [-]

You can buy long term put options.

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philipov 3 hours ago | parent [-]

That still requires perfect timing. Getting the timing right on a long-term contract is even harder than with a short-term contract!

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Maxatar 2 hours ago | parent | next [-]

How does buying long term put options require perfect timing? The whole point of a long term put option is that you only have to be right at some point between when you buy it and when it expires.

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SpicyLemonZest 2 hours ago | parent [-]

No, put options suffer from time decay and IV crush. A $1,000 MU put for December 2027 was at about $200 today. So if Micron dropped tomorrow, you'd probably start making a bit of money, although the delta is only -0.32. But if you held all the way to December 2027, Micron would then have to drop all the way to $800 before your position is profitable.

When and how that transition happens is subject to a number of complex factors, and it's not even necessarily the case that incremental drops in the stock will produce incremental gains for your put option.

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Maxatar an hour ago | parent [-]

This is a really bizare argument for anyone who actually knows about options and trades them. If your thesis is that RAM is in a massive bubble and Micron is going to crash when it bursts, you don't express that thesis by buying a put struck around Micron's current bubble price. The fact that you chose a $1000 strike as your example is weird because that's basically the most expensive way to make the argument you're supposedly making.

"IV crush" is an especially strange objection in this context. IV crush matters when you buy options at elevated implied volatility and that volatility collapses. If Micron suddenly drops hundreds of dollars because the alleged bubble is bursting then the implied volatility would sharply rise, which makes your put more valuable, not less. Invoking "IV crush" here mostly makes it sound like you've heard the terminology without thinking through how it actually applies to the scenario you're describing.

If you genuinely think Micron is going to collapse sometime over the next two or three years because this entire RAM shortage is an overhyped bubble, then the obvious trade is to buy puts around where you think the stock should return to once that bubble disappears. Micron wasn't remotely a $1000 stock before this run. We can be generous and use a $300 strike since even though that's still 100% higher than Micron's price prior to this run-up, it gets the point across.

A long dated $300 put is currently around $7 per share, so one contract costs roughly $700. If Micron eventually falls to $200, that contract is worth $10000 at expiry. At $100, it's worth $20000. If the crash happens well before expiry, it can be worth even more than its intrinsic value because there's still time value left.

If you're claiming to be certain that a gigantic bubble is going to burst and wipe hundreds of dollars off the stock price, there are long dated far out of the money puts specifically capable of expressing that position. Pointing at an expensive $1000 strike put and saying "look, options are complicated" is just a weird or rather superficial misunderstanding of some financial concepts.

	▲	SpicyLemonZest 39 minutes ago \| parent \| next [-]
		I personally use options for hedging, which I think is generally the responsible purpose of them. It's true that you can get something like a directional bet by going far enough out of the money with strong enough conviction never to exit the position early. But this also exposes you to a lot of risk that it might not pay off even though the original idea was correct. Microsoft crashed in 2000, but it never returned to its pre-1998 price, because there was some real value in the dotcom bubble and they were able to capture a disproportionate fraction of it.
	▲	philipov an hour ago \| parent \| prev [-]
		None of that helps you get memory now. You're not going to see your payoff for 2-3 years or whenever the bubble bursts. At which point the bubble has burst and you can simply buy ram at a normal price again. And the thesis of this discussion is that we can't buy memory at a reasonable price now, not 3 years from now. This isn't an abstract discussion about the usefulness of options trading or other hedging strategies. You want to pay for ram today by betting on returns years in the future? Risky play! Hope you can stay solvent.

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dcrazy 2 hours ago | parent | prev [-]

The point of LEAPS is you don’t have to perfect the timing. You buy far enough out to avoid theta decay, and far enough out of the money to minimize risk.

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philipov 2 hours ago | parent [-]

Regardless of timing, for shorts to pay out requires the market to actually correct itself. You won't be able to get your magical shorts money until the price of ram goes back down anyway. The market will remain irrational longer than you can remain solvent.

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dcrazy 2 hours ago | parent [-]

The price of RAM does not need to come down in order for a way-out-of-the-money January 2027 put on NVDA to increase in value from its current purchase price.

	▲	tom_alexander 2 hours ago \| parent [-]
		You're suggesting gambling that Nvidia will start to fall within the next 3 months? That sounds like requiring perfect timing to me.

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dragonwriter 3 hours ago | parent | prev | next [-]

Google (which is diversified more and whose performance is less likely to track AI outcomes closely) aside, the two other members of the AI Big 3 are non-public, so, no, you really can’t.

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swdev281634 3 hours ago | parent | prev | next [-]

Can I? Neither OpenAI nor Anthropic are publicly traded.

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rcxdude an hour ago | parent | prev | next [-]

You can make a lot of money with shorts if you are correct about when the market will move. If you think that the market is overestimating the real value you have not even half of the puzzle.

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vor_ 3 hours ago | parent | prev [-]

With non-public companies?

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dist-epoch 3 hours ago | parent | prev [-]

The same thing was said 4 years ago about NVIDIA on HN, that it's stock it's outrageously overpriced, given it's $20 bln revenue, that it should have at least 10 times more revenue to justify that stock price, which is fantasy, that there is no plausible way for such demand no matter what you think about GPT-2.

	▲	swdev281634 3 hours ago \| parent \| next [-]
		nVidia earning is way above zero by a healthy margin. This was also true 4 years ago. How much their shares should cost is debatable but still, nVidia is obviously a profitable business. Anthropic net loss in 2025 was $42 bln, OpenAI $38.5 bln. Both are spending enormous amounts with no obvious path to profitability.
	▲	elzbardico 3 hours ago \| parent \| prev [-]
		The market can remain irrational far longer than you can stay solvent.