For decades, memory stocks like Micron were classic cyclicals, trapped in vicious boom-bust loops fueled by fleeting PC/smartphone demand. Oversupply killed margins fast, and rallies always faded.
That's changing permanently.
The Structural Shift No One Saw Coming
AI data centers have flipped the script on memory demand:
• HBM is now the critical bottleneck for AI GPUs—essential, not optional
• Only three companies can supply at scale: Micron, SK Hynix, Samsung
• Hyperscalers are locking in multi-year contracts, killing spot-market volatility
• Capacity additions are measured and deliberate—lessons learned from past pain This is why Micron can hit new all-time highs around $319 in early 2026 (up ~10% in a single session Jan 2) after an explosive 2025, instead of crashing like old cycles.
2025 Was the Re-Rating Year
Investors finally priced Micron as "AI infrastructure" rather than "commodity cyclical." The stock more than tripled in many periods of 2025 on hype and multiple expansion.
2026 Looks Like the Earnings Year
Base case (widely shared, yet still underappreciated):
• HBM revenue mix surges (already driving 57% gross margins in Q1 FY26)
• Legacy DRAM pricing holds firm amid tight supply
• FCF explodes even without massive unit volume growth
• Micron's entire HBM capacity sold out through 2026 under committed deals If AI capex just stays flat, Micron wins big. No perfection required.
Risks (Because Nothing's Guaranteed)
• AI buildout pauses/delays hit sentiment hard
• Samsung pushing hard on HBM4 (customers praising competitiveness)
• Macro shocks can still punish cyclicals short-term But downside feels more "structural re-rating" than "existential collapse" like past downturns.
My Take on 2026
Less "too late" and more: normalized elevated margins, hype → real cash flow, memory evolving from speculative trade to core allocation.The big question: Are you still trading Micron with the old memory playbook?
Not financial advice. DYOR, trade smart!
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