The AI story remains intact with growing capex spending. Beyond memory and networking, the base level of infrastructure is electricity, which will see tremendous demand. The US has a competitive advantage in low-cost electricity. Memory companies like Micron show 85% gross margins, indicating severe undersupply. SK Hynix's potential US ADR listing is welcome as it expands the investable AI infrastructure universe.

The Philadelphia Semiconductor Index is on track for its best quarter ever, up 86% in three months, driven by AI infrastructure spending. Memory and storage companies like Micron are the real story this year, with demand expected to stay elevated into 2027-2028 due to supply constraints. Despite volatility, the fundamental story remains strong, though valuation concerns exist for some names.

Etched is emerging from stealth with $800M funding to build rack-scale inference systems using a novel low-voltage chip design. Their technology allows one chip to use memory from other chips in the system, running at under half the voltage of typical Nvidia GPUs. This enables more users per chip and lower cost per token, positioning them as a competitor in the inference market as the industry shifts from training to running AI models.