Ephemeral Fortunes and the Data-Mill

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It is a commonplace observation, and one easily dismissed in the feverish calculations of the present day, that fortunes are rarely built upon enduring foundations. Stanley Druckenmiller, a name once whispered with a certain reverence within the gilded cages of finance, operated, for a span of nearly three decades, a fund called Duquesne Capital. Thirty percent annual returns, they claim, without a single year of diminishment. A neat symmetry, a comforting illusion of control in a world governed by chance. He no longer solicits the capital of others, content now to manage his own, a sequestration of wealth that speaks volumes about the prevailing spirit of our age. Duquesne Family Office, they call it – a fortress built not upon shared prosperity, but upon the accumulation of difference.

In the most recent accounting, this Druckenmiller divested himself of holdings in Broadcom, a purveyor of the essential, if largely invisible, infrastructure of the digital realm. He simultaneously initiated a position in Sandisk, a manufacturer of flash memory. A thousand and fifty percent increase in valuation since its separation from Western Digital, they report. Such numbers possess a certain terrifying beauty, a testament to the capacity of the market to generate phantom wealth, divorced from tangible creation. It is a spectacle worthy of careful, if melancholy, observation.

The current discourse centers, predictably, on “artificial intelligence.” These stocks, we are told, are the harbingers of a new epoch. But let us not mistake the tools for the transformation.

Broadcom: The Architecture of Dependence

Broadcom occupies a dominant position in the manufacture of components for wireless and wired networks, and, crucially, application-specific integrated circuits. They are, in essence, the architects of our digital dependence. The growth of Wi-Fi, they project, will continue at a rate of fifteen percent annually until 2030. A comforting statistic for shareholders, perhaps, but what does it signify for the human spirit? More seamless connectivity, more efficient consumption, more complete enclosure within the digital panopticon.

Their true power, however, lies in the fabrication of ASICs – custom chips designed to accelerate the training and inference of these “intelligent” systems. They provide the means by which these algorithms learn, evolve, and ultimately, exert their influence. They are the suppliers to the behemoths – Alphabet’s Google, Meta Platforms – and now, to the emergent powers of OpenAI and Anthropic. A concentration of control that should give pause to any thoughtful observer.

Revenue from these chips rose by sixty-five percent in the last year, reaching twenty billion. The hyperscalers and startups, driven by an insatiable appetite for data, are fueling this growth. Beth Kindig, of the I/O Fund, anticipates a tripling of sales by 2027. Harlan Sur, at JPMorgan Chase, projects an even more astonishing fivefold increase. Such projections are treated as gospel, yet they are based upon assumptions that remain largely unexamined.

The market, of course, has already priced in this growth. A price-to-earnings ratio of fifty-one. Reasonable, they say. Most analysts concur. A target price of four hundred and sixty-one dollars per share, implying a thirty-four percent upside. But I suspect Druckenmiller, with a seasoned skepticism, recognized the precariousness of this edifice. He saw, perhaps, that the foundations were built upon sand. He sold too soon, perhaps, but his timing, as ever, was astute.

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Sandisk: The Memory of the Machine

Sandisk manufactures data storage solutions. Flash memory, primarily. For data centers, personal computers, mobile devices, and the ever-present automotive systems. They benefit from a partnership with Kioxia, a Japanese company with which they share the burden of capital expenditure and research and development. A collaboration born not of innovation, but of necessity – a desperate attempt to maintain competitiveness in a relentless market.

Flash memory is faster, more durable, and more efficient than the antiquated hard-disk drives. It is the preferred medium for training these “intelligent” systems, for running these complex applications. The hard-disk drive, relegated to the task of long-term storage – the repository of forgotten data, the archive of obsolescence. A fitting metaphor for the fate of those who fail to adapt.

Sandisk, however, attempts to distinguish itself through vertical integration. They design the process technology, manufacture the wafers, package the chips, and develop the firmware. A closed loop, designed to maximize efficiency and minimize vulnerability. A fortress built not upon openness, but upon control.

They are the fifth-largest manufacturer of NAND flash memory, behind Samsung, SK Hynix, Kioxia, and Micron Technologies. A crowded field, dominated by a handful of powerful players. They have gained a percentage point of market share, they claim. Two hyperscalers are testing their enterprise SSDs. A third will begin testing in 2026. Such incremental gains are celebrated as victories, yet they offer little solace in the face of overwhelming competition.

Earnings are projected to grow by seventy-nine percent annually. A price-to-earnings ratio of one hundred and seventy. High, even by the standards of this speculative age. The stock traded at fifty-eight dollars when Druckenmiller purchased it. It has since increased sevenfold. No longer attractive, they say. A target price of three hundred and seven dollars, implying a twenty-six percent downside. The market, it seems, has begun to recognize the inherent fragility of this digital kingdom. The phantom fortunes, as always, are fleeting.

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2026-01-17 11:13