One is, frankly, rather fatigued by the breathless pronouncements regarding artificial intelligence. Still, even a cynic must concede the beast requires sustenance, and that sustenance, my dears, is memory. Micron Technology [MU 0.60%], a purveyor of precisely that, has seen its shares perform with a vigor that, while not entirely unexpected, is still… amusing. A 314% ascent over the past year is hardly a tragedy, is it?
The question, naturally, is whether one has missed the boat. A perfectly valid concern, though one rarely finds a truly satisfactory answer. However, even at its current valuation, Micron isn’t quite demanding a king’s ransom. Not yet, anyway.
Currently trading at 39 times trailing earnings, it’s a touch extravagant, certainly. But then, most things are these days. The Nasdaq-100, for comparison, hovers around 33 times earnings, and Nvidia, that darling of the tech set, is positively giddy at 45 times. One begins to suspect a collective loss of reason.
The truly interesting figure, however, is the forward price-to-earnings ratio. A mere 12 times! Compared to Nvidia’s 24, it suggests a rather more… sensible valuation. Now, I’m not suggesting Micron is superior to Nvidia – heaven forbid! – but one gets considerably more bang for one’s buck. Or, to put it another way, the projected income costs half as much. A delightful concept, don’t you think?
This discrepancy between trailing and forward earnings implies, rather strongly, that earnings are poised for a significant expansion. And given the current memory shortage – a situation driven, naturally, by the insatiable appetite of these AI contraptions – that seems a perfectly reasonable expectation. Micron reported a net income of $5.2 billion in its most recent quarter – nearly three times the figure from a year prior. They’ve even, rather audaciously, sold out their entire memory capacity for the foreseeable future. One must admire the chutzpah.
Memory, historically, has been a cyclical business. A rather tiresome pattern of boom and bust. But this, my dears, is different. This is driven by a demand unlike anything we’ve seen before. So, is it too late to acquire Micron stock? Not at all. One anticipates continued, robust growth, at least for the next year or two. And frankly, a little excitement in the portfolio is always welcome. It distracts one from the general gloom.
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2026-02-17 10:22