Micron's guidance highlights AI-driven memory upcycle, says Morningstar's William Kerwin

Core Viewpoint - The strong guidance from Micron indicates robust AI demand, but concerns about the sustainability of this demand and the cyclical nature of the memory chip market remain [2][4][5]. Group 1: AI Demand and Supply Constraints - AI demand for memory chips is strong and significantly supply constrained, which positively impacts pricing for companies like Micron [3]. - The current supply constraints are not expected to last indefinitely, raising questions about the long-term sustainability of AI-driven demand [4]. Group 2: Market Performance and Stock Outlook - Micron's stock has increased over 40% in the past month and has nearly doubled since the beginning of the year, indicating strong market performance [5]. - The exceptional outlook for the first fiscal quarter exceeds estimates, but the modest stock price increase suggests that much of the potential upside has already been factored in by investors [6][7]. Group 3: Long-term Cyclicality - Despite strong AI demand, the memory chip market is expected to remain cyclical over the next 5 to 10 years, leading to challenges in forecasting supply and demand [5]. - The current strong performance may not eliminate the cyclical nature of the industry, which is characterized by periods of boom and bust [4].