cellardoor 🍆

Taiwan Semi saw a "little bit softer" memory pricing.

$ASML Q1 EARNINGS • Revenue $10.3B vs Est. $10.1B • EPS $8.43 vs Est. $7.83 • Net Income $3.3B vs. Est. $3.0B • Gross margins 53% vs. Est. 52% Q2 Guidance • Revenue $10.3B vs Est. $10.7B • Gross margins 52% vs. Est. 53% CEO says chip demand continues to outpace supply.

I guess as FPE is going up it will go to infinity as $MU is cyclical. Lynx Equity raised Micron’s price target to $825, a Street-high: "Beyond Micron management’s statement that its 2026 HBM capacity is already sold out, the company’s HBM, DDR5, and LPDDR5 production capacity has now been fully reserved through 2027. With 2027 allocation now complete, Micron is currently in discussions with key customers regarding 2028 supply volumes and pricing terms."

Regarding Trump's threat/decision to impose a naval blockade on Iran, color me a skeptic. 1. Taking more oil off the market, particularly the only oil that is now getting out from the Persian Gulf, will drive oil prices further up, and the paper price of oil will get closer to the actual price, which should be around $150 per barrel. A dramatic increase in inflation in the US will ensue. Avoiding this is precisely why Trump was stuck in a position where he had no escalatory options out of this conflict before the ceasefire. He still doesn't. 2. Stopping tankers carrying Iranian oil wouldn't just be an escalation vis-à-vis Iran, but also against the countries that are buying Iranian oil, which includes China, India, and other Asian countries. I doubt Trump is ready for that escalation, particularly given the upcoming summit in Beijing. 3. This is also true for punishing countries that have negotiated a toll with Iran for the Straits. That includes Pakistan, which hosted the negotiations. 4. The naval blockade escalation will make the closing of the Red Sea more likely by the Houthis. That would take another 12% of global oil flow off the market. We would now be looking at oil around $200 per barrel. There are nine or so days left of the ceasefire. Since neither side has explicitly stated that talks won't resume, or that the ceasefire is dead and over with, all these moves should be treated as tactics and threats within the negotiations. It wouldn't be surprising if these threats are walked back soon (perhaps before markets open on Monday) and a new round is announced. HOWEVER, there is a time for brinkmanship, and there is a time for serious negotiations. If the US truly was insisting on zero enrichment in Islamabad, which was not Trump's red line at first but rather Israel's, then the next talks will be rendered a failure - just as the talks in May 2025 were killed by Trump shifting to the Israeli red line. Still, I don't think that necessarily will lead to a return to war. A more likely scenario is a new non-negotiated status quo in which Tehran retains control over the Straits but doesn't get any sanctions relief, while the US pulls out of the war, and the question becomes whether Israel will continue the war on its own.

NEW: An urgent phone call from Saudi Crown Prince MBS changed Trump’s decision at the last minute: President Trump had intended to declare a complete ceasefire and end the fighting against Iran in exchange for the immediate opening of the Strait of Hormuz. However, a tense phone call with Saudi Crown Prince Mohammed bin Salman dramatically changed the plan. According to White House sources, bin Salman begged Trump not to stop the war: “This is a historic opportunity – we must finish the job and weaken the Iranian regime once and for all.” In exchange for continuing the fighting, Saudi Arabia offered an unprecedented package of economic and strategic incentives. Key points in the offer: • $100 billion transferred directly to finance American war costs • Full and immediate normalization with Israel after the fall of the regime • Direct oil pipeline from Saudi Arabia to the port of Ashdod, turning Israel into a major energy hub • Investment of approximately $1 trillion in the U.S. economy + purchase of $500 billion in American weapons • Establishment of a new regional defense alliance, including Israel, Saudi Arabia, and other moderate countries under an American umbrella • Joint naval force to control the Strait of Hormuz and Bab el-Mandeb • Funding of strategic U.S. bases in Israel • Joint reconstruction fund for a post-regime “secular and moderate” Iran In the end, Trump announced a temporary ceasefire, not an end to the war as was expected. Senior diplomatic sources describe the move as “a historic turning point” marking the beginning of a new regional order.