To The Moon

$Micron Technology(MU)$ , a memory chip giant, announced a blockbuster news yesterday. Its cutting-edge HBM3E product will start shipping in the second quarter of 2024. HBM, which stands for High-Bandwidth Memory, is like stacking DRAM chips like LEGO blocks and encapsulating them through advanced packaging, increasing their density while maintaining or even reducing their size for better storage performance. And HBM3E? It's the fastest and highest-capacity HBM memory in the industry, fueling the innovation of generative AI and a crucial component for Nvidia's AI GPUs. Compared to its competitors, Micron's HBM3E boasts a 30% lower power consumption. It'll be used in $NVIDIA Corp(NVDA)$ 's H200, potentially generating hundreds of millions of dollars in revenue for Micron in the 2024 fiscal year. After the announcement, Micron's stock price jumped 4% to close at $89.46, just shy of their all-time high of $98.45. With the volatile prices of memory chips, Micron's earnings have seen wild swings, driving its stock price to surge and plummet. It's been dubbed the most volatile stock in the semiconductor industry. As we enter 2024, memory chip prices are on the rise again, and Micron is riding the wave. Plus, with the exploding demand for AI, HBM products are in high demand. Even Micron's competitor $SK Hynix, Inc.(HXSCL)$ says its HBM capacity for 2024 is already fully booked! It's clear that the next two years will be a period of explosive growth for Micron. According to its quarterly report, management expects revenue to reach around $5.3 billion in the second quarter of fiscal 2024, a whopping 43.5% year-on-year increase! SK Hynix, which is ahead of Micron in HBM, saw its revenue surge 47.4% year-on-year in the fourth quarter of last year. Analysts predict that revenue growth will hit a whopping 127% in the first quarter of this year! That's the charm of a cyclical stock! The best time to invest in Micron was when its revenue was plummeting and its gross margins were painfully low. The next best time is now. From a valuation perspective, there's still room for its price-to-book ratio to rise. At the end of the day, Micron is poised to hit new highs. Perhaps this AI-driven upcycle will even push its valuation to new levels!