Micron Technology, Inc. (MU): A Bull Case Theory

Core Thesis - Micron Technology, Inc. is positioned to benefit from a memory upcycle and an increase in AI spending, potentially leading to significant profit growth with minor adjustments in pricing and product mix [2][3] Financial Performance - FY24 revenue is expected to rebound nearly 50% year-over-year to between $27 billion and $28 billion, with gross margins recovering to the low 40s and positive operating cash flow as inventory normalizes [2][4] - Forward guidance indicates continued revenue growth towards $40 billion by FY26, with potential EPS exceeding $12 if margins remain in the mid-40s [4] Strategic Focus - The company is concentrating on high-bandwidth memory (HBM), particularly the ramp-up of 12-high HBM3E, to meet the increasing demand for AI-driven servers [3] - A disciplined capital expenditure strategy is in place to maintain leadership in HBM and advanced DRAM technologies [3] Balance Sheet Strength - Micron's balance sheet shows resilience with approximately $10 billion to $11 billion in cash and investments against $6 billion to $7 billion in debt, and equity exceeding $45 billion [4] Market Sentiment and Technical Analysis - The stock is currently in a bullish trend, with technical indicators suggesting strong momentum, although overbought conditions may lead to potential pullbacks [5] - A pivotal after-hours report is anticipated, with expectations for a clear beat-and-raise scenario to drive the stock price towards $179–205 [5] Long-term Investment Strategy - For medium- to long-term investors, the recommendation is to capitalize on the trend, buy on dips, and allow HBM mix and pricing to drive sustainable free cash flow and compounding upside [6] Historical Context - A previous bullish thesis highlighted strong revenue growth and technological advantages in AI memory, with the stock appreciating approximately 123% since coverage, indicating ongoing confidence in the company's prospects [7]