Scott R. Grossman
Founder of Vindico Capital, Consumer-Sector Investor
Micron may need a breather as AI-bottleneck leadership passes to cheaper optical and server names. Micron might be the best trade, but it moves in waves, and Marvell's pullback suggests some of those names got ahead of themselves too. For now, hyperscalers are preferred for quality and size. x.comÂ
Widespread bearish calls for Micron to plunge to $500 on a head-and-shoulders pattern are a contrarian bullish sign, since when the majority turn bearish, buy orders pile up at lower levels. x.comÂ
Micron's options structure points higher, with a first short- to medium-term target of $1,100. Its moving averages remain in bullish expansion, gamma is skewed upward and call positioning extends to $1,300. The setup favors waiting for consolidation or a pullback to find entries. x.comÂ
Buyers rushing into Micron's gap-down open show fear is still too limited for a sustainable low. They bought hand over fist, while the equity put/call ratio stood at 0.75; significantly more pain and fear are needed. x.com x.comÂ
Micron's path to buying back about half of its shares by 2029 is extremely bullish. Per UBS, cited by @techfund1, free cash flow of about $155B, $225B and $205B for 2027-2029 lays a path to repurchasing about 30% of the company over two years and potentially about half through 2029. UBS expects the market to reward Micron with a much higher P/E as gross margins likely hold above 65-70% through the cycle. Wall Street price targets should now reflect much higher P/Es. x.com x.comÂ
Micron can still benefit from rising memory prices because 70% remains open to pricing. Those prices have been rocketing, countering LogicalThesis's claim that long-term agreements lock away the upside. x.comÂ
Micron's indecision after a 40% rally off the low suggests short-term speculators may be exhausted. Despite unprecedented institutional buying and a reclaim of its VPOC and AVWAP, the stock is not acting strong, mirroring the bearish semiconductor ETF setup earlier in the week, and it faces monthly resistance. A $90M bearish risk reversal on the October 16 $980 strike, later added to by $20M, reads as a hedge. x.com x.com x.comÂ
Micron's revenue grew faster than its stock over the past year, leaving it cheaper on trailing earnings. Quarterly revenue rose from $11.3B to $54.2B, while the stock rose from about $198 to $878 and trailing P/E fell from roughly 24x to 11.6x. x.comÂ
Micron customers are locking up supply through 2030, a very interesting signal for Micron and the broader AI trade. After a disappointing open following Micron's report, which @CKCapitalxx noted came despite a cool PCE print, any dip would be a great chance to buy. x.com x.comÂ
Micron's record run looks like the top of a cycle, with retail chasing narrative rather than inputs. It doubled from $500B to $1T in 48 trading days, the fastest ever, after an 850% gain in 12 months and a UBS target hike from $535 to $1,625. JPMorgan's Jamie Dimon named Micron as a sign of market exuberance, also flagging record-low credit spreads and possible 4% inflation. Earnings are growing, with a 0.07 PEG ratio, but stocks that double this fast get repriced violently when rotation comes. … Show more
Micron can't meet customer demand, giving it rare visibility at a valuation of about 5x next year's earnings. CEO Sanjay Mehrotra said customers are extending agreements into 2031, which gives certainty of demand and lets Micron plan capacity investments with confidence. The stock is now about $1,000, and with potential EPS beats over the next few quarters its forward P/E could be around 5, unthinkable about six months ago. x.com x.comÂ