LG Doucet and portfolio manager Melvin examine why Micron barely moved after reporting sharp revenue growth and a gross margin near 87%. They argue that strong results may already be reflected in the share price, while investors remain wary that memory supply will eventually catch demand and pressure pricing.
The bull case rests on greater visibility: Micron says strategic agreements cover more than 35% of company revenue through 2030, while over 75% of its 2027 output is already committed. New fabrication capacity will take years to arrive, but high interest rates, rising oil prices, and uncertainty around debt-funded AI infrastructure could keep the broader trade under pressure.
Melvin also connects growing AI-agent workloads to longer-term demand for DRAM, high-bandwidth memory, and storage. His practical takeaway is to use Micron’s supply commitments and customer agreements to assess major pullbacks, while recognizing that other memory and semiconductor-equipment companies may offer a better risk-reward balance after Micron’s run.
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