Profit taking: After such massive gains, investors are taking some profits off the table.
Consolidation: The market is digesting news from CES 2026 where $NVIDIA(NVDA)$ announcements about HBM4 & the unserved memory bottleneck fueled the surge.
Valuation Concerns: Even with strong demand for AI related chips & price hikes of up to 60 -70% expected, investors are stepping back to assess the high P/E ratios & potential short term volatility.
For the patient investor, this is the classic market dynamic at play. The stock market is a transfer of money from the impatient to the patient.
Today's drop is simply the market adjusting after a burst of intense action. It sets the stage for the next phase of supercycle for memory chip stocks.
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