Micron: A Memory Stick’s Wild Ride

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So, Micron Technology. A company that makes, essentially, the tiny bits of stuff that remember things for your computer. Not the most glamorous of businesses, you might think. And for years, it wasn’t. It was, in fact, a masterclass in cyclical despair. One quarter booming, the next…well, let’s just say the bean counters were looking glum. Less than a year ago, you could pick up shares for a price that wouldn’t require a second mortgage. A perfectly reasonable valuation, really. And yet, investors remained stubbornly unimpressed. It’s always the way, isn’t it? The sensible options are often overlooked in favor of…well, whatever it is people are actually buying.

The problem with memory chips, you see, is that they’re exquisitely sensitive. A slight overestimation of demand by one of the three major players—Micron, Samsung, and SK Hynix—and suddenly you’re awash in surplus, driving prices down faster than you can say “Moore’s Law.” It’s a bit like trying to predict the weather in the English countryside. You think you’ve got a handle on it, and then…torrential rain. Or, worse, sunshine. Unexpected sunshine.

But then something peculiar happened. Demand, it turned out, wasn’t just strong. It was…insatiable. And not for your average spreadsheet or cat video. Oh no. This was driven by something far more ambitious: artificial intelligence. Apparently, all those clever algorithms need somewhere to remember things. Go figure. The stock price, predictably, went rather spectacularly upwards, gaining over 300% in the last twelve months. Which, of course, raises the inevitable question: is it too late to join the party?

The Historic Business Boom

Micron doesn’t just make any old memory. They specialize in NAND and DRAM, but it’s the high-bandwidth DRAM—the really speedy stuff—that’s currently causing all the excitement. They’ve apparently sold all their supply for 2026, and are already fielding calls for 2027. It’s the sort of situation that normally sends CEOs into paroxysms of glee. Although, knowing corporate life, they’re probably just worried about finding enough parking spaces.

AI, as it turns out, is remarkably demanding when it comes to memory. The faster the memory, the better the AI performs. It’s a bit like feeding a particularly fussy gourmet. It needs the finest ingredients, prepared with meticulous care. This has led to projections that the high-bandwidth memory market will swell from a $35 billion affair in 2025 to a rather substantial $100 billion by 2028. And Micron, with its apparently superior products, is poised to grab a sizable chunk of that pie.

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Let’s talk numbers, because that’s what really gets the accountants going. In Micron’s fiscal first quarter of 2026, revenue was up a rather astonishing 57% year over year. And they’re predicting a further 130% increase for the upcoming second quarter. That’s more revenue than they generated during all of fiscal 2023. It’s the sort of growth that makes you wonder if they’ve accidentally discovered a money-printing machine. And, naturally, this translates into record profitability. They’re expecting earnings per share of around $13 for the first half of the year. Which, if maintained, puts the stock trading at a remarkably reasonable 15 times this year’s profits. Considering the 300% gain, that’s… unusual.

So What Now?

I’m inclined to believe this isn’t just a temporary blip. That Micron’s strong performance will continue for several years, defying the usual boom-and-bust cycles. Here’s why: Micron and its competitors have essentially sold out. They’re building new facilities, naturally, but those won’t come online until 2027. It’s a bit like a restaurant suddenly becoming incredibly popular and then realizing they need a bigger kitchen. It takes time, you see.

Even when supply finally increases, Micron could continue to thrive, assuming demand remains robust. And the key driver of that demand, as we’ve established, is the AI infrastructure build-out. The hyperscalers—those enormous data centers that power the internet—are still spending like there’s no tomorrow. Which, let’s face it, they probably don’t have.

This is where things get interesting. If AI infrastructure demand continues to outpace supply through the end of the decade, then Micron stock could still be a good buy. But if that demand unexpectedly falters, then Micron could quickly find itself with too much capacity. It’s a bit like ordering a mountain of lobster for a party and then discovering that everyone is vegetarian. A costly mistake.

Investors need to decide what they believe will happen with AI spending before diving in. But, for what it’s worth, I suspect Micron will outperform the S&P 500 over the next five years. Although, of course, I’m just a cynical observer. Don’t take my word for it. Do your own research. And maybe, just maybe, avoid ordering too much lobster.

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2026-02-26 13:42