🔍 MU Earnings Preview: Will DRAM Demand Justify the Rally?

Micron ($Micron Technology(MU)$  ) reports earnings this Wednesday—and the stakes couldn’t 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.

📊 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 stabilisation—crucial for Micron’s 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.

⚙️ 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.

🧠 My Take:

Micron is no longer just a cyclical memory play—it's becoming a strategic enabler in the AI infrastructure stack. However, risk remains:

• A high bar is now set—any 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.

🤔 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 “sell-the-news” setup?

• How would you position around earnings—long calls, protective puts, or wait for the dust to settle?