Micron Q1 Preview: AI Has Hit A Wall, This Is Good For Micron

Summary:

• Micron Technology, Inc.’s shares have risen modestly due to evolving market expectations on AI demand, especially in post-training inference arena, which requires more memory, benefiting Micron’s DRAM business.
• The shift from pre-training compute to post-training inference in AI models increases memory demand, positioning Micron favorably as a major DRAM supplier.
• Despite market skepticism, Micron’s forward revenue and EPS growth rates exceed sector medians, suggesting shares are undervalued with potential for significant upside.
• Risks include potential overestimation of memory needs for post-training inference, but steady GPU orders from major buyers like Microsoft offer optimism for sustained demand.
• I continue to believe MU shares are a buy.

Co-authored by Noah Cox and Brock Heilig.

Investment Thesis

Micron Technology, Inc. (NASDAQ:MU) shares are up roughly 2.6% since the last time I wrote about the memory chip company. When I last covered Micron

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Noah Cox (main account author) is the managing partner of Noah’s Arc Capital Management. His views in this article are not necessarily reflective of the firms. Nothing contained in this note is intended as investment advice. It is solely for informational purposes. Invest at your own risk.

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