KawzInvests
Co-Author of Asymmetrical Bets, Photonics/Optical Cycle, AI/Defense/Space
Micron keeps beating estimates because Wall Street's models lag memory price moves. Korean export prices move first, trackers like TrendForce follow weeks later and analysts update last, by which time Micron has signed contracts at higher prices and locked in the margin. It beat estimates by 27% and 33% in the last two quarters. That lag is structural until the AI buildout slows, and nothing suggests that soon, with hyperscalers projected to spend $400B+ in capex this year. x.comÂ
Micron's sold-out high-bandwidth memory through 2027+ and contracts already being signed for 2029-2030+ extend its earnings runway. At 5x forward earnings, it is cheaper than a year ago; its private Anthropic stake is about to be instantly rerated at Anthropic's IPO, and a new share buyback is expected to be announced Dec. 9. Micron could certainly gain 30% in three months. x.com x.comÂ
Micron's AI-driven cash generation looks outsized for its size amid market concern about debt risk. Its quarterly free cash flow has reached about $32.9B in under two years, above the peak quarters shown for Meta, Amazon, Google and Microsoft; only Nvidia and Apple have posted higher quarters, despite each being about five times Micron's size. 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's long-term contracts make its earnings far more durable, so profit growth should keep lifting the stock even without a rerating. Unfulfilled orders reached $150B from $100B; 26 long-term agreements cover over 35% of revenue through 2030, and about $32B of commitments, mostly cash deposits, cover over 75% of 2027 shipments. At about 14x FY2026 and 7x FY2027 earnings, a rerating needs stronger downstream AI monetization or tighter supply; Micron alone cannot validate the AI trade. x.comÂ
Sandisk's fast-growing data-center revenue strengthens its case among memory names with upside. Data-center revenue rose 61% quarter over quarter; revenue of $11.03B, adjusted EPS of $49.51 and adjusted gross margin of 85.1% all exceeded estimates. For upside among Micron, Sandisk and Kioxia, Micron ranks first, then Sandisk, then Kioxia, until further guidance. x.com x.comÂ
Micron faces a severe crash risk from CXMT's current threat and apparent investor complacency after a euphoric high. If the Wall St Cheat Sheet fits, most of Micron's gains across 40 years, amassed in just one year, could be erased soon. Earlier, Elon Musk said Micron had been reasonable on future memory prices; memory stocks were not yet to be faded. x.com x.comÂ
SK hynix's surging earnings challenge the idea that commodity memory profits are about to vanish. The attached report says third-quarter operating profit rose more than sevenfold and its operating margin reached 80%; analysts quoted there expect the earnings climb to continue at least through next year. Micron and Samsung are named alongside SK hynix. x.comÂ
Micron and SK hynix pricing in a memory shortage past 2030 extends the memory-cycle case beyond the Street's 2028 expectation. SK hynix's record quarter adds evidence: per Wall St Engine, revenue rose 328% to $78.9B, operating profit rose 632% to $62.8B, and operating margin hit 80%. Agentic and physical AI could add demand as they roll out. x.com x.comÂ
Micron's own guidance suggests the memory recovery comes later than consensus thinks. Its CFO guided to rising margins through fiscal 2027 alongside a more moderate pace of price increases, and Micron said it has no line of sight to when supply and demand will return to balance. x.com x.comÂ
Micron's surging memory revenue points to a supercycle. Its segment and NAND revenue charts show a sharp recent acceleration, while the stock tests its rising 30-week average. x.comÂ
