To The Moon

$Micron Technology(MU)$

The AI landscape is undergoing a tectonic shift, reshaping technology investment in profound and unexpected ways. At the forefront of the transformation stands Micron, uniquely positioned to thrive as artificial intelligence evolves beyond its nascent stages. While early AI advancements were dominated by GPU clusters powering pre-training compute, the focus has shifted dramatically. The future of AI now hinges on memory -- a domain where Micron holds an undeniable edge.

Post-training inference, the process that enables AI to interact with the world in real time, is emerging as the linchpin of modern AI applications. This methodology relies on GPUs equipped with exponentially greater memory capacity, enabling LLMs to deconstruct and resolve complex problems step by step. Micron’s DRAM technology is central to this shift. With GPUs like $NVDA Blackwell series demanding unprecedented memory capacity -- Micron’s role in the AI supply chain is rapidly solidifying.

The story of Micron’s recent success is one of surging demand and strategic positioning. AI-specific DRAM chips are completely sold out through fiscal year 2025 -- a testament to robust orders from heavyweights like $NVIDIA(NVDA)$ & $amd. Even as concerns grow about a potential plateau in GPU sales, the equation is shifting. More memory per GPU means a new and enduring growth driver, directly aligned with Micron’s core capabilities. Each advanced GPU now represents a larger revenue opportunity -- underscoring the company’s critical role in the AI ecosystem.

Yet, the market remains inexplicably cautious. Micron trades at a forward P/E of just 12, a steep discount to the sector median of 25. This valuation gap persists even as Micron’s forward revenue growth outpaces peers by an massive 703% and its EPS projections climb 235% faster. Such skepticism appears blind to the transformative forces at play, overlooking how rapidly AI adoption is reshaping demand for memory solutions. A recalibration to a more reasonable P/E of 18 would unlock more than 50% upside for Micron’s stock -- with further gains as the AI wave builds momentum.

Regarding today's earnings, analysts are looking for $1.76 EPS on $8.72B in revenue, a forecast bolstered by numerous upward revisions. This optimism reflects Micron’s unyielding strength in DRAM, which dominates nearly 70% of its revenue. Bolstered by rising average selling prices and robust shipment growth, DRAM continues to thrive as the bedrock of Micron’s business. In contrast, NAND Flash faces pricing and volume pressures, but stable enterprise SSD demand acts as a stabilizer, ensuring momentum remains intact.

Yet, the horizon isn’t without shadows. Geopolitical tensions loom large, threatening to disrupt supply chains and sales. Simultaneously, the possibility of slowing AI infrastructure investment introduces uncertainty. On top of this, fierce competition from Samsung and SK Hynix ensures that Micron cannot afford a misstep. These challenges, while substantial, do not eclipse the structural advantages Micron has cultivated in an AI-driven market.

As AI revolutionizes industries, memory has emerged as the lifeblood of this technological renaissance, rivaling even compute power in its criticality. Micron, with its dominance in DRAM and its burgeoning HBM capabilities, stands at the nexus of this shift. It is positioned not merely to benefit from the current wave of AI adoption but to play a defining role in shaping the semiconductor industry’s future. I think Micron hits $150 by next year.