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GM. This is Milk Road AI, where we spend unhealthy amounts of time thinking about semiconductors.
And today, we’re talking about one of our favourite semiconductor stocks: Micron. In this edition, we break down why Micron still has room to 4x from current prices.
Speaking of building the future, today’s partner is Arc by Circle.
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MICRON JUST POSTED ABSURD EARNINGS 🤯
The biggest story in AI right now is Micron.
The company reported earnings yesterday and the numbers were staggering.
The headline stat:
Quarterly revenue jumped all the way to $41.5B. A year ago, it was just $8.1B.
Twelve months ago, Micron (MU) was sitting at a 52-week low of $103. Yesterday, it closed near $1,050.
That's roughly a 10x return in under a year but we still think it can go higher:
1. The memory industry
To understand why, you need to understand what made people skeptical of Micron for decades in the first place.
Memory chips are historically one of the messiest businesses on earth.
The cycle always went the same way:
Demand rises → companies panic-build factories → chips flood the market → prices collapse → everyone loses money → repeat.
That cycle played out so many times that "don't trust the memory rally" basically became a rule of thumb on Wall Street.
That rule made sense for a long time but not anymore.
The main driver of memory demand for decades was consumer electronics. Your iPhone. Your laptop. Your PlayStation. Consumer cycles are predictable and they eventually cool off.
But now with the AI buildout, the landscape for memory has changed drastically.
When a hyperscaler (a company like Google, Microsoft or Amazon that runs massive cloud infrastructure) builds out AI capacity, they don't buy memory in normal consumer quantities. They absorb it at a much larger scale.
There’s now a structural shift in who the customer is and how much they need.
2. Demand for memory chips is still accelerating
On Micron's earnings call, CEO Sanjay Mehrotra highlighted a trend most investors aren't paying enough attention to:
Humanoid robots require roughly 10x more memory than Level 2 autonomous vehicles.
Over the next decade, projections call for tens of millions of humanoid robots and hundreds of millions of autonomous vehicles.
Every one of them will require memory chips.
3. Supply can’t keep up
On the supply side, the picture is just as stark. Mehrotra said tight supply conditions are expected to persist beyond 2027.
Even with aggressive capital spending, Micron can only meet 50% to 67% of medium-term customer demand.
A few more eye-popping stats:
- Micron's entire 2026 HBM supply is already sold out.
- HBM4 (the next generation) is sold out, too.
- The company has signed 16 multi-year strategic customer agreements.
- Customers have prepaid $22B in cash deposits just to secure their allocation.
All signs are pointing towards Micron moving higher.
Melvin is already 200% up on his Micron position but he’s still not selling. He thinks MU could eventually reach $4,000.
And of course, like all investments, there will be a time to sell and get out with profit - a move that Melvin will surely share with us in real-time in Milk Road PRO. But its clearly anytime soon… right Mel?
If you want to see the other AI stocks he's holding alongside Micron, you can unlock his full portfolio for just a buck.
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MICRON COULD BE BIGGER THAN YOU THINK 🤔
Want to see (or hear) Melvin break down Micron’s earnings, and explain why this trade isn’t even close to being over? He sat down on today’s podcast to share his thoughs.
Here's what you'll hear:
- Why Micron's blowout quarter, record cash flow and 85% margins look like a structural re-rating, not just another cycle.
- How AI agents and longer context windows are driving memory demand far beyond old consumer electronics cycles.
- Why supply stays tight: three players control most of the DRAM market and new HBM fabs take years to build.
- Melvin's aggressive multi-year price targets for Micron, and the key risks that could break the bull case.
Press play and dig in 👇
