GM. This is Milk Road AI, the newsletter that makes you sound smarter at dinner.
Today, we're breaking down what's happening with memory, why supply can't catch up and which stock is sitting at the center of the trade.
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NEW CATALYST FOR MICRON β‘
Was scrolling on X today and came across this update:
And it made me realize I hadn't done a Micron breakdown in a while. So let's talk about MU today.
The primary catalyst behind todayβs move is that the Phison CEO says "2027 capacity constraints will be even more severe than in 2026."
This is because building new semiconductor capacity takes years. Upstream suppliers need up to 4 years from the moment they break ground on a new plant to the moment it produces a single sellable chip.
With demand growing faster than anyone projected and supply expansion structurally limited by that timeline, the NAND shortage is likely to last for years.
NAND flash prices already nearly doubled over the back half of this year alone.
And Micron's own strategy is compounding the shortage rather than fixing it.
By shifting manufacturing capacity toward HBM (High Bandwidth Memory, the specialist chips bonded directly onto AI processors) to serve AI customers, Micron is pulling supply away from standard DRAM and NAND simultaneously.
This tightens both markets at once, pushing gross margins toward 80%.
BofA expects Micron's free cash flow to grow from $55.7B this year to $188.6B by 2030.
At this level, this figure would be larger than the free cash flow of roughly 450 companies currently in the S&P 500.
After noting all these catalysts, JPMorgan has raised its MU price target from $550 to $1,540.
But our lead analyst, Melvin, spotted this trend much earlier.
He gave Milk Road PRO members the buy signal on Micron back in March at $363.70. It's now above $1,000.
And Micron isn't the only AI stock Melvin has been early on.
He's been tracking the memory, neocloud and semiconductor trades long before they became crowded.
If you want to see what he's buying before the next big move, you can follow his portfolio along with four other PRO analysts inside Milk Road PRO.
Join for $1 and see exactly what they're buying, selling and why.
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