The bear case on WDC makes sense for cold storage tiers but I wonder if you're underweighting the nearline opportunity. A lot of hyperscalers are still using HDDs for warm data where latency isnt as critical and the cost differntial still matters. Also the post spinoff WDC might actualy be better positioned to focus on that niche rather than fighting the NAND commoditization battle. Not saying the short is wrong but curious how you weigh those factors.
I think that’s part of why the positioning hasn’t worked so far the basket is down about 17.5%. In hindsight, STX and WDC have shown exceptional near-term strength that I underestimated relative to MU. It’s been a difficult relative trade, as even most of the short legs currently have solid fundamentals and improving outlooks.
I’ve since reduced exposure on several legs and increased the MU overweight, but at this stage I view the pair more as a barometer for when this relative dynamic begins to matter. It could still be early, potentially by a year or more, assuming the underlying thesis is even correct.
The bear case on WDC makes sense for cold storage tiers but I wonder if you're underweighting the nearline opportunity. A lot of hyperscalers are still using HDDs for warm data where latency isnt as critical and the cost differntial still matters. Also the post spinoff WDC might actualy be better positioned to focus on that niche rather than fighting the NAND commoditization battle. Not saying the short is wrong but curious how you weigh those factors.
I think that’s part of why the positioning hasn’t worked so far the basket is down about 17.5%. In hindsight, STX and WDC have shown exceptional near-term strength that I underestimated relative to MU. It’s been a difficult relative trade, as even most of the short legs currently have solid fundamentals and improving outlooks.
I’ve since reduced exposure on several legs and increased the MU overweight, but at this stage I view the pair more as a barometer for when this relative dynamic begins to matter. It could still be early, potentially by a year or more, assuming the underlying thesis is even correct.