Noah
Stock Investor & Trader, US Equities
Micron's ordinary memory could see tighter supply because HBM consumes far more factory capacity than conventional DRAM. Meeting AI demand could thus extend Micron's opportunity beyond AI memory. x.comÂ
Micron's bet on 3D DRAM over rivals' 4F2 could give it an edge as AI memory demand rises. Micron expects shortages for at least two more years: HBM per GPU rose 3.6x from H100 to B300, inference memory per server doubled in three years, and agent context grows about 30x annually. It plans further 6F2 nodes, 1-delta DRAM in 2H27 and 400-plus-layer G11 NAND in 2027; processor-stacked vHBM is targeted around 2028. If Micron is right, rivals are spending on the wrong path. Overweight Micron. x.comÂ
Micron's roughly $1.37 trillion valuation already prices a durable rise in through-cycle earnings that memory's history has never shown. A reverse DCF at 9% WACC and 2% growth implies about $95 billion of steady cash flow, versus a record $9.2 billion and a ten-year average near $1.9 billion. At a 30% FCFF margin that needs about $317 billion of revenue, over 8x fiscal 2025 sales. The HBM bull case is real, but fiscal 2023's swing to a -37% operating margin shows how fast pricing reverses. x.comÂ
Micron benefits because AI needs more memory capacity and bandwidth. HBM growth and customer commitments support that view, while pricing and returns on new capacity will determine how durable it is. x.comÂ
Micron could benefit if memory demand remains strong through 2029. Nvidia CEO Jensen Huang said he sees no sign of demand slowing by then and that "you can always use more." x.comÂ
Micron faces a tough road through 2027 because the current AI spending path is not economically sustainable and tech progress can undercut memory demand. Micron's weak price action on blowout earnings is a tell. Token usage will keep rising, but Nvidia is already pivoting to LPUs with Groq, and tech progress should never be underestimated. x.com x.com x.comÂ
Each new AI wave is lifting demand across Micron's HBM, DRAM and storage products. Micron said training, inference, agentic AI and physical AI raise memory needs; the stock still trades at about 5x next-twelve-month earnings, leaving its growth story just getting started. x.comÂ
Micron is riding the AI memory supercycle: HBM for AI accelerators is sold out and prices are exploding, turning a former commodity price-war player into the hottest shovel-seller in the AI gold rush. From Q4 FY25 to Q4 FY26, revenue rose 379% to $54.2B, operating income rose about 12x to $43.8B, and EPS jumped from $2.86 to $33.36. x.comÂ
Micron's projections are set so high that even great years may not be enough to meet them. Samsung's Q3 results show the risk: revenue of $145.6B missed the $150.7B estimate, and operating profit of $80.2B missed $81.1B. x.comÂ
Micron makes huge profits from what goes into Nvidia's GPUs, without the circular financing that is a house of cards. Nvidia's products can't be built without Micron's memory, yet Micron fell after Nvidia's earnings when a 10% rise would have made sense. The Nvidia call also signaled demand for TSMC, which makes all the GPUs. SK hynix is less attractive for now because of an upcoming lockup expiry. x.com x.comÂ