MU - Micron: Don't Ignore The History Of Memory Cyclicality

2024-06-29 08:30:00 ET

Summary

• Micron stock has outperformed my expectations, driven by Nvidia's incredibly robust AI upcycle.
• Micron is keen to gain market share in HBM memory chips.
• Samsung is also expected to increase production significantly, subsequently increasing potential risks of oversupply.
• Near-term earnings visibility is expected to remain robust. The potential for oversupply from 2026 could emerge.
• I argue why MU's medium-term upside seems limited, but the price action is signaling caution may be warranted.

Micron: I Was Too Cautious Previously

I must admit that Micron Technology's ( MU ) stock has outperformed even my most optimistic projections. Therefore, my previous Hold rating on MU seems too cautious as MU continues its upward trajectory. Although I assessed higher potential oversupply risks, I'm not bearish on MU. However, my concerns have not panned out as Nvidia's ( NVDA ) AI upcycle has been more sustainable than anticipated. ...

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