Micron Technology
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That’s great …appreciate the insight
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A good way to gauge Microns future prospects if we assume they know what they are doing and can execute(they can) is to look at the landscape. Demand drivers. It doesnt matter if it's a GPU server or a TPU, Tranium , basics server. Today it's all about the cloud(the DC) but this will shift to the edge. And robots nor autonomous cars factor quite yet but clearly will. If we are constrained now my view is we can only get more constrained before we even hope to balance supply/demand. So, whilst the experts are debating what will happen in 1 year, im leaning towards a decade. As Ive mentioned before, listen to what TSM are doing and everything else cascades from there.
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Some broadband facts that ive been pondering recently.
Over the next 7-10 years we are quite certain that if CC.Wei, Huang and Su are even remotely right, we will see rack scale growth of 50% per annum and each generation of rack consumes 20-25% more HBM. This is roughly 87% annual growth in demand. Global supply growth is limited to max 25% annually even with today's planned fab builds.
HBM3e and HBM4/4e demand is skyrocketing across server generations—Blackwell → Ultra → Feynman—driven by hyperscaler AI growth. GW-class deployments illustrate the scale: ~50% annual server growth and 20–25% memory density increase per node compounds into roughly 87–90% annual HBM capacity demand.
Supply simply can’t keep up. Even with aggressive greenfield fabs, wafer throughput, yield, and equipment constraints make matching demand impossible for many years, likely a decade. Prices are structurally set to rise.
Micron, Samsung, and Hynix dominate this niche, giving them extraordinary pricing power. HBM’s unique combination of bandwidth, latency, and power efficiency makes alternatives—DDR, GDDR, or CXL-attached memory—unable to replace it for high-performance compute. This creates a durable bottleneck, and the market rewards longevity; investors may expand multiples due to sustained, predictable growth, reinforcing upside. With growth rate certain come multiple expansion
In this environment, Micron could see a near-decade “renaissance”: multi-year high margins, rapid revenue growth, and favorable market perception. If demand persists and supply remains constrained, revenue could multiply several-fold, and with multiple expansion. The combination of exponential demand, scarce supply, and technological moat creates a structural HBM market imbalance that will shape AI server economics for the foreseeable future.
Even if my math is way off demand it's a fact that demand growth will exceed supply growth for a very long time. It's one to watch
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The fact it was $90 a year ago. It's as simple as the parabolic short duration being pre disposed to a bigger than avg move down when investors(I use that term loosely) get nervous. They report 2 weeks tomorrow.
The expectation is about $8.36 EPS. I think they'll deliver $11-earnings not expected for 3 more quarters. Fwd PE of about 7 with growth TTM 100%, at least 50% CAGR 5 years(PEG =0.14) OR you too can buy Crowdstrike with a Fwd PE of 60 and 15% growth (PEG=4). On this metric the stock is over 50X more expensive than Micron.If you look at Micron it traded sideways from feb through May moved to $120 sold offa. bit (what happened), well it got stronger but people sold, thinking it was done and all stocks encounter selling at new levels because that's what people do. The problem is those same people just look at a price and make a decision. It was only 10 months ago that Nvidia fell from $125 to $89 on nothing but great news and 2 days later it was $115 over 25% in 2 days. We have seen this sort of thing countless times-it's human nature. When stressed some people do foolish things and more rational investors take advantage of the situation.
The only risk for Micron is they fail to execute on their roadmap and 50 years experience suggests that risk is tiny. Demand is growing 70% per annum for their products(lets call it 50%) and is expected to be the same for at least 5 years and probably 7+ (so says people I trust Wei/Huang). Bit growth(supply) can not keep up and will not because you can not magic up a fab in months. It take years, so it is obvious the imbalance will persist for years and prices for memory will keep rising. I say obvious, obvious to me.
The earliest time frame for some sort of balanced supply.demand imo is 2029/30
What you see with a company like Micron, is the old classic 'but it's risen 300% in a year' it cant do it again or it must be time to sell. I would say, tell me why you think that. The price appreciate is influencing ones decision making when in fact it's not of much relevance at all other than some thinking(?) they can cash in and rotate into something else. Good luck with that when the evidence strongly supports continued material undervaluation. Often the best investment is the one you already hold, and personally I like to get overly familiar with my holdings.
All I can say is, in all history companies with 50% annual growth and PEs below 10 don't exist. So on that basis alone I am very happy holding and waiting. And given we paid circa 1X next years earnings, maybe 1.5, we have a comfortable margin of safety.
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If you believe nvidia will sell more racks next year than this year and Vera Rubin uses much more than blackwell. A top tier blackwell rack uses 192GB of memory, a Vera Rubin rack uses 300GB+ and Feyman will use > 500GB. And more racks will be sold so demand is:
TrendForce's 70% YoY demand growth in 2026; Goldman Sachs' 77% in 2026 and 68% in 2027), demand is indeed "a lot higher" supply-focused estimates—potentially 70-100% YoY bit growth (demand) through 2027, driven by GPUs (NVIDIA/AMD) and ASICs (e.g., Google TPUs, custom chips). Bit growth(supply) is estimated 35% in 26, 50% in 27 and 45% in 28. That is a very big imbalance which can only mean prices go up and there is a fight over who gets the silicon
The racks will get built but someone is going to be left without any supply and it won't be Nvidia imo because they have all the money to advance purchase whatever they need. AMD don't.
I've alluded to it before-HBM is the most critical component and the most scarce. I won't say what I think the stock is worth but I think a PE of 25 is not unreasonable, I also think the market is under estimating the EPS figure materially. Only months ago the experts thought it would earn $17 in 2026 total and it's closer to $50 this year and $75+ (maybe much more in 27).
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And just in. A new product and worth double digit billions-every one sold
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What a difference a day makes-almost back. Must have read my post
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@Adam-Kay said in Micron Technology:
What a difference a day makes-almost back. Must have read my post
I don't think I could ask for a better response to my eMail of yesterday!
Thanks for the explanation, and for tweaking the share price up as you did. (
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Micron Technology received two bullish analyst updates today, reinforcing positive sentiment around the memory chip cycle.
Citigroup, led by analyst Atif Malik, maintained a Buy rating and raised its price target to $430 from $385. The firm expects continued strength in memory pricing, driven largely by accelerating demand for AI infrastructure.
Meanwhile Susquehanna, through analyst Mehdi Hosseini, reiterated a Positive rating and lifted its price target sharply to $525 from $345 — a significant increase reflecting stronger long-term expectations for memory demand.
Analysts broadly believe the AI boom is tightening supply of advanced memory such as high-bandwidth memory (HBM), which is essential for training and running large AI models. This demand is supporting forecasts for rising DRAM prices over the next year.