MU: Memory Cycle is Over and the Bubble is Popping
The $Micron Technology(MU)$ memory cycle is over and the bubble is popping.
At least that's what the market is pricing after a 25% crash in two weeks. There's just one problem: the "bubble" is sold out for the next two years.
Two weeks ago $Micron Technology(MU)$ printed one of the greatest quarters in semiconductor history: $41B in revenue, up 345% YoY, 85% margins, and guidance for $50B next quarter. The stock made new ATHs at 1259... then gave back 300 points on cycle fears.
But this isn't the old Micron; 16 take or pay contracts with binding price floors and $22B in customer deposits mean customers pay whether they take delivery or not. Management says margins at FLOOR pricing would still exceed past peak margins. Bears are trading the 2018 playbook against a company that rewrote the rules.
The chart is now backtesting the exact zone that launched the last leg. 966 was the breakout level; $Micron Technology(MU)$ sits just under it at 938 with monthly support at 810 below. Reclaim 966 and hold, and 1100 comes fast. Thru 1100 and the ATH retest at 1259 is in play. Break 1259 and the 1500 melt up thesis is fully alive again.
HBM4 Is the Inflection
$Micron Technology(MU)$ was just approved as an HBM4 supplier for $NVIDIA(NVDA)$'s Vera Rubin platform with shipments starting this half. HBM4 revenue already crossed $1B and the ramp is moving 2x faster than HBM3E did. Micron now sees the HBM market topping $100B by 2027 (a year earlier than projected). First wafers from its new $9.3B Japan fab came off the line on July 4, and fresh supply deals with Ford and GM keep widening the demand base.
Trade Ideas
$Micron Technology(MU)$ above 966
Swing Trade: MU 8/21 1500C
Day Trade: MU 7/10 1000C
The market is pricing the death of the old memory cycle. It hasn't noticed the new one has a floor under it. When it does, the reclaim will be violent.
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