MU - Micron's Selloff Poses As A Good Buying Opportunity For The Cyclical Upswing
2024-07-22 03:27:09 ET
Summary
- Micron is positioned for a significant upswing as eFY25 HBM chips are sold out; I anticipate the firm will generate $21.5b in aEBITDA firmwide.
- I believe this recent sell-off post-earnings has created a good buying opportunity for investors seeking to take advantage of this cyclical upswing.
- Capacity for their HBM chips will begin to improve in 2027 with the Idaho fab bringing in meaningful production; the New York fab is expected to begin production in 2028.
It’s no secret that Micron Technology’s ( MU ) share performance has been relatively lackluster since reporting q3’24 earnings at the beginning of July 2024 . Though investors may have been spooked by the higher-than-expected capital investment forecast for eFY25, this should not have come to anyone’s surprise as Micron is in the process of transitioning their chip manufacturing equipment to cater to higher powered chips using EUV lithography as well as breaking ground on their Idaho fab, which is expected to contribute production in 2027. While this is in the process of being constructed, the New York fab remains in purgatory as Micron awaits permitting and regulatory approval to break ground and isn’t expected to meaningfully impact the income statement until 2028....
Micron's Selloff Poses As A Good Buying Opportunity For The Cyclical Upswing