$Micron Tech(MU.US)

Post 2 of Episode 24

Context: What has strengthened my Micron thesis is that AI is increasing the value of memory across the entire data-centre stack, not just HBM. Micron is already shipping HBM4 in high volume for its lead customer, while its latest 512GB DDR5 server module targets increasingly memory-intensive AI and analytics workloads. At the same time, HBM consumes disproportionately more wafer capacity, which can tighten supply across conventional DRAM as well.

My trade: I therefore see MU as more than an HBM beneficiary. It gives me exposure to a broader structural shift where AI servers require substantially more high-performance memory at multiple levels. That is already showing financially: fiscal Q3 revenue reached a record $41.46 billion, while Micron guided Q4 revenue to roughly $50 billion with an extraordinary ~86% gross margin.

Takeaway: For years, memory was treated as the cyclical component sitting beside the processor. AI may be changing that relationship. When compute gets faster, memory increasingly determines how much of that compute can actually be used — turning memory from supporting hardware into part of the bottleneck itself.

* I have reduced my Micron position ahead of earnings to reduce risk. Might add back if price action and earnings are good.

@Captain's Treasure