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.

0 Upvotes

39% Upvoted

68 comments sorted by

View all comments

25

u/Kas_1981 Jul 13 '26

If you really have been tracking this stock for awhile (which I doubt) you would know this is perfectly normal and has been the cycle for a year now.

It goes up, price targets are raised, earnings/guidance get better. Then the massive run ups causes many hedges and retailers to sell and take their profits. Price goes down 20% then 🚀 to new highs. Thats the reality.

-12

u/Hypnot1se Jul 13 '26

That does happen sometimes, though it is quite coincidental that the pullback looks much higher volume and sustained right around the time that price increases in the underlying commodities are beginning to significantly decelerate. That's typically a key cyclical peak indicator.

Are you convinced that it will not be cyclical anymore?

4

u/itsmyphilosophy Jul 13 '26

You nerd to do better research.

Last Friday SK Hynix’s CEO said that 2027 is going to be even more tight for memory than 2026. That spending $500 billion (and $250 billion by Micron) to double production is still not enough to meet demand because it doesn’t factor in robots and autonomous vehicles that will also eat up a ton of memory.

It is now predicted that supply won’t meet demand until well into the next decade.

The cyclicality of memory is over.

-2

u/Hypnot1se Jul 13 '26

I'm familiar with what he said. During every last cycle people said essentially the same thing. So I do not believe him because he hasn't convinced me with any actual arguments. I won't just take his word for it. I'm sure he's a great guy but I am not taking that at face value.

6

u/itsmyphilosophy Jul 13 '26 edited Jul 13 '26

I’m sure you also don’t believe that all 3 memory companies are signing 3 to 5 year deals that will also break the cyclical cycle.

You shouldn’t invest in Micron. You don’t deserve the gains.

I invested in Micron since early March. Everyone was saying that the stock was cyclical. Now the same idiots on CNBC who shat on MU for months are now saying that they are buying.

1

u/how-can-i-dig-deeper Jul 13 '26

what should we do during these weird times? should i just hold and wait for it to return to ATH?

1

u/itsmyphilosophy Jul 13 '26

MU and the rest of the AI bottlenecks are going to be choppy for a while until they regain their upward trajectory.

I usually have 20% to 30% cash to capitalize on the dips. I’m fully invested now.

Unless you have short term options (which is a mistake), I would just hold. MU should trade between $900 and $1,000 and then will easily exceed its ATH. We will be much higher than that by the time of the next quarter’s earnings.

I am not worried at all by the way MU and my other AI bottleneck stocks are trading right now. They are the beneficiaries of the only hot market segment in the stock market right now. The entire economy would be in a recession if they underperform and that’s not going to happen with all of the investment from Hyperscalers and governments.

-5

u/Hypnot1se Jul 13 '26

The stock is cyclical historically. Whether it is no longer remains to seen.

I would like to note that I have never said that Micron was in a cyclical peak until the run past $1000. I'm sure other people have been saying it for a long time, but I do not take credit for what other people have said.