Serenity Says Investors Are Selling AI-Linked Stocks Indiscriminately as ESMT Trades at 1.6x Annualized P/E

According to ChainCatcher, investor Serenity said on X that severe market deleveraging is driving indiscriminate selling of AI supply-chain stocks, with some shares falling back to levels seen before major orders and earnings expectations were realized. Serenity cited memory-chip maker ESMT, which has a market capitalization of about $2 billion and reported $526.2 million in third-quarter gross profit and $330 million in net profit. It has about $937 million in net assets, including roughly $740 million in net cash. Annualized based on current results, its price-to-earnings ratio is about 1.6. Serenity said concerns about a peak in the cycle, earnings sustainability and competitive barriers overlook tightening DDR2 and DDR3 supply as manufacturers including Samsung and Micron phase out production and Nanya Technology has halted related lines. ESMT expects higher average selling prices in the fourth quarter could offset weaker consumer demand. Serenity also said long-term supply agreements and price floors help support earnings at Micron, Samsung, SK Hynix and SanDisk. It contrasted selling AI and memory companies that generate substantial cash flow with buying Walmart at about 47 times earnings and CrowdStrike at about 180 times forward earnings, saying investors are focused less on free cash flow than on indiscriminate selling.