Mitchell Martan
Investment Researcher for The Long Investor, Economics/Finance Background
Micron could sell off aggressively unless its guidance shocks the Street by a large margin, because expectations are so high that results look priced for perfection, much like Palantir and Nvidia. Strong earnings are widely expected and largely irrelevant. Micron guided to about $50B of revenue next quarter at roughly 86% gross margins, said the supply crunch will persist through end-2027, and expects to return 100% of excess cash to shareholders. x.com x.com x.com
Inflation, rising rates, Chinese competition and rising AI-related financial costs are pressuring the memory market. Micron, Samsung and SK hynix look exposed; waiting for the cycle to turn. x.com x.com
Micron and SanDisk are a skip: DDR4 prices rising 50% quarter on quarter is already consensus, and both stocks have run on it. The surprise sits in legacy DRAM makers Nanya and Winbond, which are hard to access. The more promising gap is on the optical receive side, in photodiodes, InP substrates and germanium supply, rather than in crowded EMLs and switch optics. x.com
Micron's memory leadership remains intact because it is sold out into 2027. A red day does not change those fundamentals; anyone arguing it has topped must identify which part of demand breaks and when. x.com
Micron is at its top because memory stocks peak when margins peak, well before the shortage flips to oversupply, expected by 2028. Memory is tech's most brutally cyclical business: shortage, record prices, margins and capex, then new capacity arrives at once and becomes a glut. Micron trades at record highs on record DRAM prices, with memory's biggest capex wave under construction. In past oversupply cycles it fell 90% in 2000, 80% in 2008, 50% in 2018 and 47% in 2022. x.com
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.com
SanDisk CEO David Goeckeler's report of customer signals beyond fiscal 2030 adds storage to the long-duration AI hardware-demand case. He says those signals come through new-business-model partnerships; Micron and SK hynix in memory and Lumentum in photonics were already cited as signs of demand beyond 2030. x.com
Memory stocks are at the peak of the cycle, and FOMO buying into Micron and SanDisk now could be one of the dumbest moves. Chinese factories are coming online at lightning speed, which is why Micron is signing multi-year deals, and pricing power is peaking right now. The market is forward-looking, so a low forward P/E matters little if net income drops 60-90% a few years out. Per Kalshi, the memory ETF just passed $25 billion in assets for the first time. x.com x.com x.com
Memory stocks are one of the easiest buys right now because supply has no visible path to catch up with demand. Micron CEO Sanjay Mehrotra said the company currently has no line of sight on when memory supply will catch up with increasing demand. x.com
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.com
Sandisk looks risky at these levels because China's YMTC is stabilizing cutting-edge NAND yields and ramping production, a predictable threat not yet priced into the stock. Per @jukan05, YMTC plans to mass-produce its most advanced NAND at Wuhan Fab 3 from H2 2026, is winning major overseas customers, and is projected to surpass SK Hynix and Micron in NAND output by year-end. x.com x.com