Citrini analyst Jukan said on Aug. 8 that the market will move toward shorting storage and going long optical interconnect in the near term, with some hedge funds already executing the trade. His three reasons: Korean leveraged ETFs have largely failed, adding selling pressure from LP redemptions; Nvidia is trimming the HBM configuration of Rubin Ultra in favor of optical interconnect across racks; and the market has formed a consensus that storage prices will peak within two quarters. Jukan remains bullish on storage long-term but is slightly bearish short-term and holds no storage position.
Citrini analyst Jukan said on Aug. 8 that the market will shift toward a short-term stance of being bearish on storage and bullish on optical interconnect, adding that some hedge funds have already started executing this strategy.
He laid out three reasons. First, Korean leveraged ETFs have largely ceased to function, with concentrated redemptions from limited partners adding extra selling pressure. Second, Nvidia is trimming the HBM allocation of Rubin Ultra and instead using optical interconnect to link multiple racks; even if per-rack performance does not improve, the cluster level can still maintain an advantage. Whether the HBM cut stems from supply issues or demand issues, the logic holds. Third, the market has formed a consensus that storage prices will peak within the next two quarters.
Jukan made clear he remains bullish on storage over the medium and long term, but is slightly bearish in the near term and currently holds no storage position.
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