MU - Micron: Optimism Appears Fully Baked In Through 2026 - No Margin Of Safety

2024-04-16 09:00:00 ET

Summary

• Our previous Hold rating has not panned out well, with Micron already running away by +44.2%, well outperforming the wider market at +4.5%.
• It is apparent that we have underestimated the bullish support surrounding the stock thus far, as the management also won the HBM3E contract for NVDA's next few launches.
• Perhaps this is why MU continues to report excellent FQ2'24 earnings while offering a promising FQ3'24 guidance and intensifying its long-term capex plans.
• Despite so, the stock has pulled forward much of its upside potential and does not offer a compelling dividend investment thesis.
• With much of the premium already baked through 2026, we do not believe in chasing MU stock at these inflated levels.

We previously covered Micron Technology ( MU ) in January 2024, discussing why Mr. Market continues to reward the stock with the premium valuations, attributed to the refreshed PC replacement cycle and potential tailwinds from generative AI....

For further details see: