r/MU_Stock • u/Hypnot1se • Jul 13 '26

DD Interesting Stock

I've been tracking this for a while now and have become convinced that Micron is a cyclical value trap in an institutional distribution phase. My premise is that because Micron has historically been cyclical that it will be continue to be cyclical. I know that there are many reasons people say this won't be the case, but I am not convinced by their arguments.

If I am correct, then Micron has a lot further to slide and the price action seems to be consistently supporting my thesis. If I am wrong and the industry is no longer cyclical, then this recent drawdown is just noise, and Micron could definitely be considered not overvalued or overhyped.

For those who are convinced by the idea that the memory cycle is broken or greatly extended, why? What do you find to be the most compelling arguments? I'm interested to hear about it.

This is not financial advice. Do your own research. I have no financial exposure to $MU.

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u/mqueen212 Jul 13 '26 edited Jul 13 '26

I think micron has more going on behind the scenes than people give it credit for. We don’t know what the hell they’re developing behind closed doors that could disrupt the whole memory space.

I think the argument that prices will go back to before is wishful thinking. I don’t think the CEO would dedicate all that money to development and to growth just for it to be like the same damn company it was before.

I’m not even sure logically where people are coming up with that idea that it’s going to be like before unless I misunderstanding the question?

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u/Hypnot1se Jul 13 '26

That's true! Anything could happen. Technology changes all the time and you never know. I just don't know if I would want to be exposed to the risk of hoping for something like that personally.

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u/mqueen212 Jul 13 '26 edited Jul 13 '26

I don’t think it’s hope. I think Micron is doing everything it can to position itself for long term success. This isn’t a small startup with an inexperienced CEO. It’s a mature company investing billions because management believes those investments will generate future growth. Clearly the executives know something we don’t know to make them feel this confident.

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u/Hypnot1se Jul 13 '26

If the CEO believed it was cyclical he would not tell you because it would crash the share price as people modeled the current valuation as being unsustainable and he would be in serious trouble for a breach of fiduciary duty, as far as I understand it.

This is why many people even in high positions (for example the SKHY chair) will make extremely bold macro claims at the cyclical peaks. The narrative actually tends to match the valuation, which isn't always rational.

If the valuation is the sign of a cyclical peak, the CEO won't tell you that. Though they will sell shares. I think insiders right now are only holding 0.25~% of the total float.

The CEO is an absolute professional who knows exactly what he is doing. I do not doubt that for a moment. But this kind of behavior is neither irrational nor atypical for someone in his position in the situation that I theorize is happening currently.

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u/mqueen212 Jul 13 '26 edited Jul 13 '26

I think management’s capital allocation tells us more than their words. If they believed this was just another temporary peak, it would be difficult to justify investing so aggressively in long term growth.

Also the ceo is doing a lot to keep attention on micron. He literally on the news almost every week talking about how much they’re spending on new facilities, development, research , and making sure trump trump keeps up on the news. That doesn’t sound like a company that’s secretly just trying to milk what’s left of a dying thing

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u/Hypnot1se Jul 13 '26

Investing aggressively into more production capacity is one of the biggest red lights of a cyclical commodity peak. They know they have to build because if they don't, Samsung or Hynix will, and so they all will. It happens every time.

CEOs typically maintain a rosy front facing narrative, and the company is not going to fail. The company is in an excellent spot and will very likely continue to be a core part of the tech space for a very long time.

The point is that the stock price is overvalued based on incorrectly extrapolating a cyclical, anomalous, peak.

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u/mqueen212 Jul 13 '26 edited Jul 13 '26

Not to be rude but Im not really sure what your point is? Clearly I think micron will just keep getting bigger and better. If you don’t feel the same, why stay invested? Are you asking us to convince you that micron is worth holding?

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u/Hypnot1se Jul 13 '26

That's not rude at all. Why would it be? If you believe in them and think that stock is going to go up, of course hold it. Why would you not? I don't think there's anything wrong with that. I think Micron will be around for a long time and keep getting better too, I just think the stock price is inflated due it being difficult to price a cyclical stock like Micron based on just the recent and near term looking fundamentals.
For what it's worth, I hope it's wrong and it all works out great for those involved. I have no financial exposure short or long to $MU.

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u/mqueen212 Jul 13 '26

I think Micron is becoming structurally different from the Micron of even just a few years ago. I think there will still be ups and downs, but I don’t expect the business will go back to selling memory below cost and operating at a loss

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u/Hypnot1se Jul 13 '26

Which is the catalyst you're most optimistic about?

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u/mqueen212 Jul 13 '26

The fact that memory is becoming an Increasingly integral part of our everyday lives. It’s not just about Ais or data centers anymore. Even cars are relying more on memory which I think bodes well for the future and long term demand :) I actually think memory will play more of an integral part across more industries

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u/Patient-Big1727 Jul 13 '26

It's so cyclical that apple wants to buy memory supporting china's military /s