Micron’s Tuesday: A Slow Descent

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It happened again. Micron (MU 2.39%) decided to stage a little solo performance of downward mobility on Tuesday, shedding about 3% by late morning. And, for the record, it’s doing this despite being enthusiastically patted on the back by Wall Street. It’s a bit like my Aunt Carol insisting on wearing a sequined jumpsuit to funerals – well-intentioned, certainly, but not exactly a signal of good times.

Yesterday, the folks at TD Cowen declared a $600 price target, predicting Micron would ride a wave of DRAM riches to a glorious $60 a share. They seemed so… confident. It reminded me of the time I tried to assemble a bookcase from IKEA, armed only with a butter knife and a can-do attitude. Today, it was Deutsche Bank’s turn to issue a glowing recommendation, only to watch investors politely ignore it. You start to wonder if these analysts are secretly running a contest to see who can be the most spectacularly wrong.

Why Deutsche Bank Thinks Micron Isn’t Entirely Doomed

Apparently, the DRAM memory chip supply is “unprecedentedly” tight. Melissa Weathers at Deutsche Bank used that word – “unprecedentedly.” It’s always “unprecedentedly” something, isn’t it? Combined with a healthy appetite for DRAM and HBM (high bandwidth memory – I had to look that one up), she figures this translates to higher prices and, naturally, fatter profits for Micron. It’s a compelling narrative, though I find myself instinctively bracing for the inevitable plot twist.

She’s a little less exuberant than the TD Cowen crew, forecasting earnings of $46.50 this year. Still, she values the stock around $500, arguing that a 11x earnings multiple is… reasonable. “Reasonable” is a dangerous word in the stock market. It’s what I tell myself when I justify buying another unnecessary gadget.

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So, Should You Buy Micron?

Here’s the thing. While Weathers is busy recommending Micron and raising her price target, she’s also whispering the same warning we heard yesterday from Barron’s: competitors might flood the market with supply, causing prices to plummet. Samsung, apparently, is gearing up HBM production. It’s like building a sandcastle knowing the tide is coming in. You can enjoy it for a few minutes, but ultimately, it’s a losing battle.

Even at 12x earnings, Micron isn’t exactly a risk-free proposition. It’s a semiconductor stock, which means it’s subject to the whims of a notoriously cyclical industry. My therapist tells me to accept the impermanence of all things. She doesn’t own stock.

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2026-02-10 20:02