Kyle Reidhead
CEO & Analyst of Milk Road/Milk Road AI
Micron's memory demand could outlast current forecasts because sparse AI models must keep all their weights in HBM even when only a fraction is active in computation. Kimi's 2.8T-parameter model activates 104B per token but needs roughly 3TB to hold its weights; serving millions requires parallel copies. If models reach 100T parameters by 2030, each copy could need about 100TB. Micron should continue to outperform the market. x.com
Micron's move to 3D DRAM could keep it leading the industry as rivals chase a constrained 4F² path. Wedbush says 4F² faces density, complexity and cost limits; Micron is furthest along on 1c and its H2 2027 1-delta timeline keeps it ahead. Wedbush reiterated Outperform with a $1,400 target, about 60% above the close. AI memory demand is still building: Micron says agent context lengths could grow about 30x a year, and L4 cars could use about 4x the DRAM of today's L2+ cars. x.com
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.com
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.com
Networking, power and compute look more durable than cyclical memory in the AI buildout. Lumentum's revenue compounded year after year across the 2010s and 2020s, unlike Micron's; AWS revenue also compounded. Lumentum, Nebius, Bloom Energy and Credo should heavily outperform SanDisk and Micron from here, though AI itself remains heavily doubted. x.com 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
Agentic AI's repeated context favors cache memory and storage demand for Micron, SK hynix and Sandisk over fresh GPU computation. Per @demian_ai, about 95% of input tokens for DeepSeek V4.1 Flash on OpenRouter were cache hits; storage matters unless routing and caching keep almost everything in GPU memory. New products such as 3D DRAM and HBM-on-logic could be the final trigger for a full memory-stock re-rating. x.com x.com
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.com
The memory cycle still has plenty of demand ahead for Micron and SanDisk, but recurrent depth is a technical challenge to the HBM trade. Nanbeige 4.2 3B runs a 22-layer stack twice, nearly doubling compute while the memory holding its weights stays the same; Sebastian Raschka notes it kept about 75% of standard token efficiency. KV cache and bandwidth needs still grow. If AI can reuse memory for twice the work, each gain may need fewer extra memory chips than investors expect. x.com x.com
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.com
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.com
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.com
