Weekly|Scale-Across, Capacity Constraint Everywhere We Look, Memory ASP Normalization Is Healthy, GOOG Consolidation Over Brain Drain, LITE & COHR, NBIS, AMAT, AMD, SMTC, FUNDA Product Day
Earnings season is winding down, and the striking thing about the tail of it is how uniform the message has become: the constraint is capacity, not demand, and it is the same constraint in every part of the stack we cover. LITE and COHR both beat and guided FY27Q1 revenue up 24% and 12% QoQ at the midpoints. Nebius said it could sell its entire 2027 capacity today if it wanted to, cleared its first Blackwell auction 15% above the prior record, and is now pricing short-duration capacity at $40-50mn/MW against $20-25mn/MW on core contracts. AMAT guided FY4Q26 well above the buy-side bar with customer visibility running to 2028 and 2030. Scale-across, meanwhile, stopped being an architecture slide and became order books and sized TAMs this quarter, with Arista putting switching, routing and optics at $15-20bn by 2030 and Ciena putting transport at $8-10bn by 2029. The bottleneck underneath it all is the same InP and semicap supply chain that cannot be willed into existence, which is why we would rather own the constraint than the narrative here.
Memory is where we most disagree with the consensus read. The flattening in ASP growth is being interpreted as the top of the cycle. We think it is normalization, and the mechanism is not hard to see: consumer devices cannot absorb further price increases, and CSPs are signing LTAs at prices below spot, so blended ASP growth decelerates by construction while vendors gain upfront payments and penalty protection. Kioxia told us at FMS it can fill only 40-50% of demand and expects the rest to roll into next year, which is what Micron has been saying. SanDisk’s investor day then put a floor under the argument with a mechanism that holds non-GAAP gross margin near 80% even at minimum contract prices. Higher for longer, not peak and collapse.
Last, on Google. The market read Jeff Dean, Sanjay Ghemawat, Quoc Le and Oriol Vinyals leaving as a brain drain. We read it closer to the opposite. Most of those names had already drifted away from the frontier-LLM execution line, and Google’s problem after Gemini 3 was never talent or compute; it was too many senior leaders and two centers of gravity between London and Mountain View. We believe concentrating authority under Koray is the fix, not the damage.
One piece of housekeeping, and it is the thing we would most encourage you to sign up for. We are running FUNDA Product Day this coming Monday, 17 August at 10:00 AM ET. Investors have been asking to see the new Plays in detail, so this session is a live walkthrough of four of them: Trending Topics, which clusters social-media discourse across AI, space and adjacent themes into influence-weighted narrative topics with tickers attached; the Top and Bottom Indicator, a three-layer framework for market turning points combining a daily short-term signal, a weekly contrarian composite across credit spreads, positioning, flows, breadth, volatility and sentiment, and a daily overheat/washout gauge on semis; AI Labs Monetization, our monthly estimate of Anthropic and OpenAI annualized revenue with the range and implied growth around it; and the SpaceX Revenue Forecast, built bottom-up across Space Services and Connectivity off disclosed actuals and live pricing and subscriber inputs. We will show how each one is built and what data sits underneath it.
Register for FUNDA Product Day →
We published thirteen reports across our channels this week; the rundown is below.
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