Biotech2k
Biotech Investor, AI-Driven Drug Discovery
Micron makes huge profits from what goes into Nvidia's GPUs, without the circular financing that is a house of cards. Nvidia's products can't be built without Micron's memory, yet Micron fell after Nvidia's earnings when a 10% rise would have made sense. The Nvidia call also signaled demand for TSMC, which makes all the GPUs. SK hynix is less attractive for now because of an upcoming lockup expiry. x.com x.comÂ
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.comÂ
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.comÂ
Micron could fall if Nvidia launches new integrations with Groq at its conference next week, as expected, which would reduce reliance on DRAM. That likely explains the highly unusual $18.2 million of Micron puts expiring next week, flagged by @CheddarFlow. x.comÂ
Micron is a buy on the AI buildout, more compute and rising memory demand, stated tongue in cheek. A roughly 5% drop back under $1,000, which @hamids could not explain, does not change the buying. x.com x.comÂ
Micron is the obvious AI play now, much as Nvidia was in hindsight, because every AI GPU is limited by memory and there is no scaling without it. The market does not yet understand how big HBM demand could get. x.comÂ
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.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 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 is a loser from the AI-lab drama because it needed AI training runs to stay hot. Elon Musk, Dario Amodei and Sam Altman have pivoted to messaging that AI could kill you, and with AI already polling badly, that could make it very hard for AI to keep attracting the investment dollars it was getting. If the money dries up, a slowdown in frontier training would undercut that demand. x.comÂ
Micron is one of only three memory makers, and high-bandwidth memory for AI accelerators is the move. x.comÂ
