The Month Memory Broke. Our thesis is un-changed.
BluBird Capital, August 2nd, 2026
July was a bloodbath, and I’m not going to soften it. Memory names fell 40–50% or more. SMH fell ~18%. If you were long this complex. it was the worst four weeks of the cycle.
So this week I want to do three things: explain who was actually selling , lay out how I’m managing my own book through it, and re-anchor on the one thing that hasn’t changed the structural reason memory re-rated in the first place.
This weekend I spoke with a ex- executive at Sandisk who managed a business unit there and worked with Sanjay Mehrotra on several occasions. I am going to try to get an interview with him to understand the inside workings of the memory industry. We will try to focus on the “cyclical” part a little better and if anything has changed with longer term SCAs and LTAs.
Who was selling: the Leopold blow-up
The violence of July’s memory drawdown wasn’t a fundamentals story. It was a forced-deleveraging story, and it has a name.
Leopold Aschenbrenner’s Situational Awareness the roughly $45 billion AI-infrastructure fund that had returned north of 1,000% since 2024 lost about 67% in July and was forced to liquidate its entire public-equity book to Citadel in a distressed block trade, according to CNBC and Bloomberg reporting. Assets fell from ~$45B to around $10B, most of the remainder being private holdings. The fund reportedly ran leverage as high as ~400%, and its prime brokers (BofA, Goldman, JPMorgan) worked to meet margin calls before the fire-sale.
Here’s why this matters to us specifically: the fund’s largest disclosed positions were Micron, SanDisk, Nebius, CoreWeave, and SK Hynix each of which shed more than 35% in the rout. Are these buys? I do not own Nebius. If you want to own a Neocloud, Nebius is your best bet. I prefer to stay with colocation plays.
The weekend twist: crude reverses
Raise your hand if you are tired of this War narrative? I know, I am.
The other half of July’s story was energy. Front-month Brent (Sept) rose 23.59% on the month, breaking a three-month streak of declines to close around $90.12.
That premium started bleeding out this weekend. President Trump said over the weekend he had called off a planned strike on Iran. Oil fell hard on the news WTI down roughly 4–6% toward the low $80s, Brent back toward the mid-$80s.
That had an opposite effect on indexes overnight:
Dow +0.3%,
S&P +0.4%,
Nasdaq-100 +0.7%
Between Leopold, elevated Crude and bond rates we had a trifecta of pain in July.
