Micron Technology

mikeiow

I’ve probably said a few times, but when I was in a tech company (a unicorn, no less), the correlation between performance+results announcements and the share price very rarely lined up

Always something of a mystery to me: 23 years there, almost 100 quarterly announcements yet I still remained clueless as to the machinations on the NASDAQ

“results were expected”, or “price built in” were often bandied about….but the good companies continue regardless, and stock would rise over the weeks ahead
Quality of leadership and product are what count

Doesn’t stop me feeling like the markets remain rather frothy: can the bull keep running forever?
….but it is hard to disagree with Adam’s analysis on here that gives me hope

Adam Kay

Cast your mind back to when we launched the Technology model. The PH forum 'SP500'. Paraphrasing 'tech is done-crash imminent' and this has been repeated adnauseum for 4+ years since and a decade prior. I see they are still at it. In fact take any time frame and the same crowd simply repeat the same narrative(who feel it necessary to post about stocks). Like their opinions have any value whatsoever.

In stock-market psychology, I'd describe the mindset in that PistonHeads thread as persistent loss-aversion expressed as perma-bearishness.

The underlying psychology isn't simply "they think shares are expensive." It's more like this:
They experience the pain of an imagined crash more strongly than the pleasure of participating in a rising market. Once that fear becomes established, they continually search for evidence that validates it.

“Can this bull market run forever?” — No. Can equities remain in a long-term upward trend forever while suffering periodic corrections and bear markets? In principle, yes.

2BToo

Helpful commentary all. Thanks.

I look forward those 'stocks rising over the weeks ahead ...'

exIM

@Adam-Kay said in Micron Technology:

In stock-market psychology, I'd describe the mindset in that PistonHeads thread as persistent loss-aversion expressed as perma-bearishness.

This made me chuckle

I'm always amazed the amount of time/effort this type put into that mindset !

Adam Kay

There are others ...There is something faintly absurd about an investment forum obsessively marking our homework and service while apparently declining to mark its own. Markets have the useful habit of eventually replacing rhetoric with arithmetic.

Adam Kay

Micron’s $35 Billion Share Buyback: The Beginning of an Extraordinary Capital Return Programme?

Micron Technology’s announcement of a $35.16 billion share repurchase authorisation could prove to be one of the most significant developments in the company’s history. However, it is not simply the size of the announcement that matters. It is how the figure was calculated that offers perhaps the most compelling indication of what shareholders might expect over the coming quarters.

On 8 October, Micron’s board approved approximately $33 billion of additional repurchase capacity, bringing the total authorisation to $35.16 billion. Crucially, Micron’s SEC filing confirms that the increase was calculated using 100% of the previous quarter’s adjusted free cash flow, less specified deductions for dividends and government incentives.
The maths is striking. Micron generated $33.199 billion of adjusted free cash flow during its fiscal fourth quarter, with the resulting $33.025 billion, after dividends, forming the basis of the additional authorisation. This is not a coincidence. It establishes a direct relationship between the cash Micron generates and the amount its board is prepared to authorise for shareholder returns.

The implications could be enormous.
Micron’s management has already signalled its intention to return substantially all excess cash to shareholders. With restrictions governing repurchases under its CHIPS Act funding arrangements entering a new phase from 9 December 2026, the company is approaching an important turning point in capital allocation.
My central speculation is that this $35 billion announcement represents the first instalment of a much larger, recurring repurchase programme, rather than a one-off event.
If Micron continues to follow the same approach, future quarterly authorisations could increasingly reflect the free cash flow generated in each preceding quarter. This is not yet a formal commitment to quarterly increases or immediate execution, and each expansion requires board approval. Nevertheless, the precedent is unusually clear.
The potential scale becomes particularly interesting when considering fiscal 2027.

Under a bullish scenario in which Micron generates approximately $150 billion of annual free cash flow, the company would have the financial capacity to authorise extraordinarily repurchases. That represents an average of $37.5 billion per quarter, although actual cash generation will almost certainly fluctuate.
A series of quarterly authorisations broadly matching eligible free cash flow could therefore result in repurchase capacity expanding by well over $100 billion during the financial year, potentially approaching $150 billion after the relevant deductions.

Ducati996R

I’m sure that your are across this Adam …
How many shares does that buy back and then leave out there in people’s hands

2BToo

@Ducati996R said in Micron Technology:

I’m sure that your are across this Adam …
How many shares does that buy back and then leave out there in people’s hands

And another (possibly very stupid question): who's shares are being bought back? Are some investors getting out of MU?

Adam Kay

there are sales every day. MU(Treasury) is no different to any other buyer. It's all on the open market, no difference. $35B is circa 3% but the point is they are clearly signally that this is a quarterly proposal. 10%+ per annum

2BToo

Thanks Adam. That makes sense.