If you blinked at all over the last year, you missed one of the most explosive runs in the semiconductor sector in recent memory.

Both SanDisk and Micron are up several hundred percent in a short period of time, and both are now being added to the major indexes.

What was driving it? AI workloads require enormous amounts of high-bandwidth memory (HBM), and the manufacturers simply could not keep up. Micron’s management noted that some customers were receiving only 50-66% of their memory needs.

One thing you learn in markets rather quickly: the most bullish stocks thrive on shortages, squeezes, and panic buying events. These are always the most explosive moves. Also, they are real, they show up in the data, and at least in the short-term, show up in earnings. This is not just hype alone.

It’s tangible, reported, and observed no matter how short-term of hype based it may be.

Most importantly. oftentimes the smartest money picks up on these events long before people like me are writing about it.

So, this post is a reminder of a few core market cycles that never tire:

1. The hardest thing to do is find these moves before they happen. If it were easy, everyone would be rich finding explosive stocks by the day.
2. The next hardest thing is to not chase them. When they are being written about covered extensively, that often is the final next stage.
3. The market loves stocks that have products or services that have little competition and are in such high demand, that they control pricing.
4. Related to point three, these kinds of squeezes drive short-term mania in markets as traders catch on.
5. But, most importantly, only a few companies every truly hold on to this pricing power and scale. For the select few that make it out, they are truly different and have a long-term plan to scale. One example of this is Apple after releasing the iPhone.

Now, on to the next. Patience always pays. Never rush into any theme or move, but always learn lessons from it.