Micron: A Temporary Reprieve

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The current enthusiasm for artificial intelligence, a fever dreamt up by Californian visionaries and their obliging financiers, has naturally led to a scramble for anything remotely connected to the business. Nvidia, predictably, has been the beneficiary of this collective delusion, its share price inflated to levels that would have startled even the most optimistic of railway promoters. One begins to suspect a bubble, though one is rarely rewarded for stating the obvious.

The question, of course, is where to position oneself when the inevitable correction arrives. To avoid the wreckage entirely would be prudent, but one must occasionally dabble. Micron Technology, a name that conjures images of dusty circuit boards and overlooked engineers, appears to be the least objectionable of the available options. Not, let us be clear, a sound investment in the conventional sense, but a potential beneficiary of the aforementioned mania, and therefore, a temporary reprieve from the prevailing boredom.

The Memory of Things

Nvidia’s success, if one can call it that, rests on its graphics processing units – elaborate toys for the digital age. But even the most sophisticated toy requires a foundation. Micron provides that foundation, in the form of memory chips. It is a decidedly unglamorous role, akin to supplying the coal that powered the Industrial Revolution, but essential nonetheless. And, as with coal, demand is currently exceeding supply, which, in the eyes of the market, justifies a certain amount of… exuberance.

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This ‘high-bandwidth memory’, or HBM as the technicians call it, is apparently crucial for the functioning of these AI contraptions. Without it, the whole edifice collapses. Bloomberg, a source of both information and hysteria, predicts that the market for HBM could swell to an improbable $130 billion by 2030. Micron, if one accepts their projections, could capture a quarter of this bounty, adding a substantial sum to its coffers. One suspects these figures are optimistic, but in the current climate, optimism is a virtue.

Morningstar, a firm usually given to sensible, if tedious, analysis, estimates that HBM already accounts for 15% of Micron’s revenue. Last year, they generated $37.4 billion. Thus, $5.6 billion came from memory chips. Not a fortune, but a start. Demand from smartphones, automobiles, and personal computers – those relics of a bygone era – could, they say, accelerate growth further. One remains skeptical, but one is always open to being pleasantly surprised.

The Illusion of Value

The stock, at present, trades at a relatively modest 12.6 times forward earnings, which, compared to the Nasdaq-100’s lofty multiple of 25.8, suggests a degree of… restraint. Analysts, those purveyors of wishful thinking, expect a 300% increase in earnings this year. A remarkable feat, if achieved. They are also becoming bullish about the next year, thanks to the favorable memory pricing environment. One wonders how long this ‘favorable’ environment will last.

Assuming Micron generates $42.36 per share in earnings next year and trades in line with the Nasdaq-100, its stock price could reach $1,093. A 173% jump from current levels. Impressive, if it happens. The stock has already soared 277% in the past year. One suspects this is less a reflection of fundamental value and more a symptom of the prevailing irrationality. Nevertheless, one might consider acquiring a few shares, if only to participate in the inevitable denouement.

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2026-02-01 15:22