Brad Freeman
Equity Researcher, Creator of Stock Market Nerd
Micron's fundamentals look strong enough that investors are wrong to shrug them off over worries about the cycle peaking. Per the earnings call, Micron is almost sold out through 2027, cannot catch up to demand in 2028 and is signing contracts for 2030, which customers' capex commentary supports. Results will be ugly whenever the cycle peaks, and things could change quickly, but everything that needs to look good does now. x.com 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 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.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
Demand for Micron's products is through the roof, making its revenue surge only the beginning as it heads into 2027. The attached eight-quarter chart puts Q4 FY26 revenue at $54.2 billion, and Micron's gross margin is cited at 86%. A $100 billion revenue quarter could arrive in the not-so-distant future; the stock is a good bet here. x.comÂ
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
Micron faces a 'gravity' setup that will be very hard to break without forecasts and earnings beating expectations by 100%. During the dotcom bubble, Micron hit its 0.618 Fibonacci level as the yield curve uninverted, just as it is doing now: the 10-year/3-month spread is +117 bps, the 30-year yield is nearing 6.0%, HYG has broken its 50-period moving average and LQD looks set to fall toward 2008 lows. 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'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
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
Micron trades at 7x forward earnings, below its 11x 10-year median, because the market is pricing a cycle peak that does not look close. Revenue of $54.2B beat the $50.5B expected, and guidance of $61.5B topped $56.8B. Over 75% of 2027 output is contracted, customer agreements rose to 26 from 16, and management expects worse shortages in 2027-28; price bands on most contract revenue set a floor and cap upside. Consensus FY2027 FCF of $117B, a 9.8% yield, exceeds higher capex. x.comÂ
