Why Micron Stock (MU) Climbs Today and What Top Investor Expects Next

Micron (NASDAQ:MU) shares are moving higher this morning, rising about 3% as investors react to a bullish note from KeyBanc Capital highlighting continued strength in memory pricing and sustained demand tied to AI infrastructure, reinforcing expectations that earnings momentum can extend into the coming quarters.

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That upbeat tone arrives at an interesting moment for Micron, because despite the company’s astounding growth, a long-standing concern has continued to linger over the story, centered on the cyclical nature of the memory business where periods of strong profitability have historically been followed by steep downturns.

For some market participants, the prospect of another downturn has been enough to keep them on the sidelines, a hesitation reflected in the stock’s ~20% decline since the March earnings release.

And yet, the underlying numbers tell a very different story. Micron’s latest quarter delivered revenue of $23.9 billion, up 75% sequentially and 196% year-over-year, while the company is guiding for another step higher to $33.5 billion in the current quarter.

With fundamentals accelerating even as skepticism lingers, the key question becomes whether this cycle is beginning to look different from the ones that came before.

Top investor Julian Lin hasn’t fully abandoned his view that MU remains, at its core, a cyclical play, but he now acknowledges that the upside potential may be far greater than previously assumed.

“It is clear that the high points of this cycle may end up far higher than anyone can expect,” says the 5-star investor, who is among the top 2% of stock pros covered by TipRanks.

Lin acknowledges that the “extreme shortage” throughout the market has allowed MU to enjoy “unprecedented pricing power.” This has led to “astonishing” gross margins of 75% and “incredible” GAAP operating margins of 68% in the last quarter.

Going forward, Lin notes the recent concerns surrounding Google’s TurboQuant algorithm, which is set to decrease the amount of memory needed for AI processes. However, the investor is choosing to lean into the Jevons Paradox, whereby greater efficiencies will drive increased usage.

And yet, despite believing that Micron will beat consensus estimates during the medium term, Lin still thinks that the memory business won’t escape its cyclical nature. That prevents him from going all in on MU.

“I do expect supply to eventually catch up, and this may put pressure on the upward potential of the stock,” concludes Lin, explaining his Hold (i.e., Neutral) rating. (To watch Julian Lin’s track record, click here)

Wall Street, on the other hand, is embracing the bull case. With 26 Buys and 3 Holds, MU sprints to a Strong Buy consensus rating. Its 12-month average price target of $533.53 points to an upside of ~46% from current levels. (See MU stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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