đ MU Earnings Preview: Will DRAM Demand Justify the Rally?
Micron ($Micron Technology(MU)$ ) reports earnings this Wednesdayâand the stakes couldnât be higher. After a strong rebound since April lows, the stock has rallied over 40% YTD, riding the tailwinds of surging AI demand, memory price stabilisation, and broader semiconductor optimism.
đ Market Expectations:
⢠Street consensus is pricing in a revenue beat and a narrower loss per share.
⢠DRAM contract prices rose ~15% in Q2, and NAND saw stabilisationâcrucial for Micronâs bottom line.
⢠Gross margin recovery will be closely watched. Last quarter, it stood at ~10%. A shift toward 20%+ could drive a valuation re-rating.
âď¸ Industry Tailwinds:
⢠AI servers and data centre demand are driving high-bandwidth memory orders.
⢠Inventory digestion cycle appears to be behind us, setting the stage for ASP increases.
⢠Peer signals are bullish: Samsung and SK Hynix recently raised production guidance.
đ§ My Take:
Micron is no longer just a cyclical memory playâit's becoming a strategic enabler in the AI infrastructure stack. However, risk remains:
⢠A high bar is now setâany earnings miss or weak forward guidance could trigger a sell-off.
⢠The stock's RSI is nearing overbought levels (>70), suggesting a technical breather could be due.
đ¤ What's Your Call?
⢠Are we in the early innings of a multi-quarter DRAM supercycle?
⢠Will Micron surprise to the upside, or is this a âsell-the-newsâ setup?
⢠How would you position around earningsâlong calls, protective puts, or wait for the dust to settle?
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