Micron Technology
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Hi C,
It's an algorithm not a chip and it's a nothing-burger. It has no impact on memory requirements whatsoever and it shows you just how ignorant the participants in the market are.
Google’s “Turbo” narrative is intellectually lazy. The leap from “better AI efficiency” to “less memory demand” ignores how technology adoption actually works. Efficiency lowers costs, which expands usage—basic economics. Dumping Micron Technology on that headline assumes AI growth is fragile and linear, when it’s explosive and compounding. It’s a textbook case of headline-chasing algos and shallow thinking masquerading as insight. No serious analysis, no nuance—just reflexive selling. If this is the market’s level of reasoning, it’s not pricing risk; it’s broadcasting confusion.
And if you want to get technical....
First, the “post rack-scale GPU” reality: once you’re deploying clusters at that level, memory bandwidth and capacity (HBM, interconnect efficiency, etc.) are hard constraints, not optional luxuries.
Software improvements don’t remove that—they just let you push the hardware harder. That typically increases utilisation, not reduces demand.
Second, the token growth point is the killer. If total tokens processed have exploded ~2500×, then a 6× efficiency gain is statistical noise. You’re still looking at orders-of-magnitude net growth in compute and memory demand. The denominator is moving way faster than the numerator.
Third, these optimisations aren’t new. Google and others have been shipping incremental efficiency gains for years—compiler improvements, sparsity tricks, better routing, quantisation, etc. The so-called “Turbo” angle isn’t some step-function event; it’s part of a continuous curve.
So the sell-off in Micron Technology assumes:
efficiency gains suddenly matter more than demand growth
and that this time is different from every prior cycle
That’s a weak assumption. In practice, efficiency gains + exploding demand = more total infrastructure, not less.Micron is so worried it's just about to buy another plant and repurpose it( 4 million sq feet) to accelerate its roadmap. And customers are signing 5 year supply agreements, scrambling to secure their supply chain, including Google who is a major customer. Rather than listen to the FUD look at the evidence. The company can only supply 50% of orders and > 80% margins and that imbalance is getting worse. It also completely ignores the edge device market which will be orders of magnitude bigger than data centre.
It's like the Deep-Seek moment we dont need these GPUs...oh wait.
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Thanks Adam ….as always appreciate your insights
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and right on cue. Morgan Stanley today said ...
Morgan Stanley, in a client note reiterated their over weight rating and $520 price target on MU.
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They must be on this Forum
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Micron’s “monster” Q3 guidance, issued in mid-March 2026, projected revenue of approximately $33.5 billion with an 81% gross margin. At the time, this was beyond strong. The guide is the strongest growth in corporate history-but it just got even better.
Analysts and consensus models likely incorporated more conservative server DRAM contract price assumptions of around 10–15% QoQ for Q2 2026 (April–June calendar, microns quarter 3 covers March through May). Why, because Trendforce provide market data on what customers are paying/bidding.
Yesterday TrendForce revisions have dramatically upgraded that outlook to roughly +45% QoQ for server DRAM prices. This meaningful positive surprise implies higher average selling prices (ASPs) than previously modelled, particularly as new contracts roll into Micron’s fiscal Q3/Q4 2026 and Q1 2027.The impact could be substantial: elevated server and HBM pricing would lift revenue beyond current forecasts while expanding already-record margins further, thanks to the favourable product mix and limited near-term supply growth. Operating expenses are largely fixed whether they deliver $33B or $40B for that matter.
Modelling that ASP change we are looking at $38B revenue and $25 eps. This is one quarter not a year with a stock now at $357!
Worst case scenario-prices stabilise, best case they keep rising for the next year. They aren't going to fall and will likely rise a bit more but if we model flat ASP and just look at MUs bit growth of 25% thats a base of $100 EPS for 12 months and a 25% growth rate going fwd. With a PE of about 3.
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Official Nr's on memory for the April-June Q
Q2 2026
Quarter on Quarter(not annual changes) ASP-
PC DRAM prices: revised up from +10~15% to +40~45%
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Server DRAM prices: revised up from +10~15% to +43~48% The big one
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Mobile DRAM (LP5X) prices: revised up from +13~18% to +58~63%
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eSSD prices: revised up from +15~20% to +68~73% The big one
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TLC/QLC NAND prices: revised up from +15~20% to +60~65% The big one
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Overall NAND Blended ASP: revised up from +18~23% to +70~75%
so when I said +45% above- it looks like it's actually a lot more-nice!
Looking at last Q, $24B and a $33.5B guide. We know bit growth is limited to +7% QoQ maybe a bit more but that is still a lot so to get to 33.5B we can infer the assumed ASP rise built into their model notwithstanding any change in mix.
Given prices are up a lot more than 30.45% a massive beat is a given. It wouldn't surprise me if they report close to $40B this quarter and $24-$25 eps. Last years Q3 revenue was $9.7B. $1.62 eps.
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Micron taking a bit of a bloody nose again today ….
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It's frustrating for sure, C. However it's the same pattern of behaviour with 'AI' at the moment-disbelief.
What you have here is the business and its management (at the coal face) taking new business, signing unprecedented 3-5 year supply deals, committing vast sums in Capex and now doubling down on that investment. Two camps, believers and non believers. There is also a lot of foul play and FUD.
Everyone is forgetting that GOOG themselves is one of the biggest 'memory' buyers and they have the biggest 2026 Capex ($175B)-they too are constrained by memory.I noticed yesterday that Nvidia is now trading at multiples below the S&P average yet its growth rate is the highest. When you look at the situation, holding stocks that are thriving but beaten down it's quite clear when the fear lifts we will see a profound correction.
I think the market is wrong and not just slightly so.
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This is based on known committed data centre alone. It does not include edge cases. This additional annual GW (the only smart way to look at the build out). And yes 2025 was a big year but compare 15GW of built to 25 in 2026 and 40 in 2027.
Reiterating-algo's and compression make no difference to the HBM required at the server(hardware) level. It just makes inference cheaper. As it gets cheaper, consumption increases.
Shortage is measured is millions of TB. 2025 up to 50M TB shortage and growing to 1 billion TB shortage in 2030. Or looking at it another way 2026 demand is 120M TB but the shortage could approach 1B TB in 5 years. Even if wrong by a huge margin, demand exceeds supply. This is based on all Capex committed today-even if Capex increases next year and beyond, it will have minimal impact on the demand supply landscape to 2030 due to build duration.
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I’m sure you’ve seen the note re Citi noting that DRAM spot prices have dropped by 6%. …. But they still give a higher price than today of $425 from $510
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I have ;). Spot prices havnt fallen-oh 0.26%. Big firms hug the stock price. They never want to be an outlier. Im not aligned to 510 either
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