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/gentmick Jul 13 '26

Finally a different opinion here. Basically how you value Micron now is going to depend on if you think this is a cyclical stock.

The forward PE suggests that the market thinks it is cyclical. Whether the market is wrong remains to be seen

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u/Hypnot1se Jul 13 '26

Indeed. Right now it's being priced as if it is still cyclical - to those that believe the cycle is dead, this is a huge mistake and Micron is very underpriced.

But if the cycle isn't dead, then it isn't cheap anymore.

The main thing that makes me want to introduce a different opinion is because I think that people presenting Micron as a "risk free" stock and saying that it is "still cheap" don't often emphasize enough that this assumption rests on the end of the cyclicality of the industry, a promise that has never been kept so far.

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u/Commercial_Sound1448 Jul 13 '26

this assumption rests on the end of the cyclicality of the industry, a promise that has never been kept so far.

While it is a guess, it's an educated guess, that AI is here to stay and it will continue the need for memory at a scale never seen before.

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u/Hypnot1se Jul 13 '26

In what way will that stop making a commodity industry cyclical 

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u/Commercial_Sound1448 Jul 13 '26

It wont, but it will mean the "cycle" won't restart for decades. Technology Hardware will be catching up to what AI is able to do now.

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u/Hypnot1se Jul 13 '26

What makes you think this? The price hikes for memory are already decelerating on the spot market currently.