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Hey guys, welcome back. Coming to you a little late here in Madrid. I might be a little jet lagged, but I want to drop a quick video. I'm here in the lobby of my hotel. I don't want to wake everybody up across the entire uh hotel or in the city of Madrid, but I had to share what we saw in today's market because it's exactly what we thought we would see one day after Micron just dropped that absolute beautiful print onto the street.
So, we're going to review all the performance of the memory titans today. Some move faster than others. We'll talk about the reason why behind that, and I want to pull out some of the key comments from the CEO's call with with the analysts yesterday to show you some of the signals of things we need to look at uh moving forward.
Some things also that maybe help even strengthen our conviction even more for Micron, if that's possible. We'll see new price targets that hit the street today cuz believe me, after that earnings call, all the analysts are on board now. They're all updating their price targets. They all want to act like the smartest guys in the room now at this point.
Smartest guys, smartest gals in the room, whatever it may be, but here's the reality. All of us on this channel, we already knew what we saw yesterday. We knew the strength in this company. We had conviction in Micron. We knew that the sector needed to be re-rated, that it was fundamentally different with the growth of AI, and memory was at the center of the AI infrastructure buildout.
So, to us, it was a validation yesterday. To all the other analysts, I think they're finally starting to come on board, and that's exactly what we saw with the price targets as well. But also, I want to get into this, are we entering into the dawn of the agentic era? That's exactly what Micron CEO talked about, and there was a huge new partnership that was announced yesterday at the end of the day yesterday that I want to get into also that shows that this may be where we're moving.
And believe me, if we're moving into the the agentic era, and soon into the robotics era, the exponential need for memory, it's going to go higher. It's going to be exponentially higher across the board. So, let's dive into the video. Let's take a look at how the stocks performed today. Guys, sorry if I ramble a little bit.
I am tired. It's here in Madrid. So, have a little patience with me, but I wanted to drop this video and share my thoughts with each and every one of you. So, let's dive in and take a look at what we saw with the with the memory Titans first. As you can see on the screen, we'll start off we're not going to start off with Sandisk.
Sandisk had an absolutely fabulous day, but we're going to start off with Micron. You can see Micron 16% growth. So, remember what we said, historically in the last 12 beats 60% of the time down. Well, that number's going to change now. And that's what we saw in the pre-market yesterday. There was no possible way after that earnings print hit the street and it validated every single thing that we know about this company, we know about this sector, and the guidance that they gave for Q4 moving forward that we were going to see this stock drop.
No absolute way. So, that's what we saw today. $167 gain per share. You can see over here to the right we have a new 52-week high of 1255 for Micron. So, we are pushing. We're getting close to that 1500 and beyond, but it closed today at 1215.79. An absolutely fabulous day. If you look in the after hours, you see we're at 35 giving back about 35 about 3% across the board.
Probably should expect to see some profit taking tomorrow morning. We actually saw some today. If you look at the candle chart here, you can look at this massive gap up we had. And we did have some profit taking coming right out of the board. Soon as that pre-market numbers hit the street, when that opening bell rang and Micron gapped up, we saw some algorithmic selling.
That's exactly what you saw here in the first kind of 30 minutes of trading overall. But the beauty after that, you saw the institutional players, you saw the retail players step in and show conviction for Micron. Across the board just drove that stock higher and higher throughout the day. A little dip, but again, nice strong finish across the board.
I would say the RSI is looking beautifully neutral right now. So, I I have any fears of it being over over bought, kind of overheated, extended, not at all. I think this stock is sitting perfectly where it needs to be. It has room to continue to run moving forward. It may have a bit of a pullback as I mentioned in the morning because of because of profit taking, but this stock is going to move higher.
And let me show you why also because as I mentioned, the analysts were all jumping on board talking about price targets across the board. These are just a few of them, but they all came in today. You can see every single one of them. Deutsche Bank, I don't know. I guess it wasn't they didn't increase.
Oh, they went up by $50. Oh, sorry. 1,500 to 1,550. Those are my exact price targets for Micron, but you see 1,200 to 1,500. 1,500 to 2,000. So, DA Davidson continues to be the most bullish for Micron on the street. No question. They were the first ones to go to 1,500. Now they're the first to go to 2,000.
And we see that Wedbush Wedbush goes from 1,300 to 1,400 across the board as well. So, lots of new price targets, lots of buys, lots of upgrades, or overweight ratings as well. In fact, if I just scroll here, you can see the overall consensus for Micron is strong buy. We have 38 buy, one sell, and four hold across the 43 analysts that are ranking the stock overall.
So, really strong day for Micron. As I mentioned, it was going to validate the entire memory sector, and that's what it did. But SanDisk went off on its own. SanDisk put on $420 a share today. Almost 421 up 22%. $2,300 to close that. It closed off pretty close to its 52-week high. You can see over here at 2,354 across the board.
So, this was a absolutely stunning day for SanDisk. The price targets didn't move for SanDisk like we saw with Micron, but it is just pushing higher. And you can see in the after hours about a 2% kind of give back as well, but but SanDisk, if you look at the top gainers for the day, as you can see on your screen here, there's it was saying this.
SanDisk was by far the highest gainer. Second was Micron, and then you see Applied Materials after that. ASML, interesting thing also that we didn't I didn't call out yesterday in Ernie's report that Micron did announce a partnership with ASML as well. So, we'll dive that into another video cuz I got a lot to cover today, but I just want to show you that SanDisk led the way today.
That was a massive move. Western Digital, just to pull that up quickly, Western Digital closed at 675.39 up about 5% today, $31. But, look to the right. It actually got up to 729 today in the intraday high. Not as high as we got it and saw it recently when it got up to 800, but 729, pretty strong across the board for Western Digital.
It's given about a 1% back in the after hours right now. And then, Seagate also had a strong day, $32 gain, little over 3%. After hours are given about 1% back right now. And the intraday high got up over 1,100 a share. So, no question about it. What we saw today was a re-rating across the board. Micron's strength that they delivered into the market to show the demand, to show what is the pricing power they have, the demand that is maintaining in the market, the fact that their CEO said that there is no end to demand outstripping supply anytime soon.
It's going to stretch into 2028. Those were just strong signs across the board. We saw our South Korean friends drive higher as well. It just validated all of the memory players across the board. I also want to show you just how the options played out differently today cuz we talked about the options quite a bit leading leading up to the earnings call.
that the IV just dropped, right? It dropped by about 10% on the top of that left-hand column over there. You can remember, prior to the options, that IV the implied IV was running at about 106, 107%. Right now, we see it down to about 92%. It's actually just over a 10% drop across the board. But, look at the number of contracts that were traded today, too.
Across there on the right side where it says today's volume. You had over 1.5 million contracts traded today, nearly doubling the 30-day average that we see with Micron, which is roughly in about 900,000 or so. The implied volatility, it took a 10% drop. The IV percentile though is still locked at about 90%.
You can see right underneath it. The expected move significantly down. Only down to expected move about $46. So, that volatility range has tightened up quite a bit and if you can see across to the right of that, the expected range is anywhere between 1167 to 1259 to 1260 across the board. But, right below it, like I called out earlier, here on barchart at least, there's 41 analysts that are covering it, 31 with strong buy, five with a moderate buy, and five hold.
So, there's no sell analysts like here like we saw uh over on uh what we were looking at early on investing.com. So, what is driving this kind of massive, besides the beautiful numbers that we saw, like what is driving this institutional herd, this this kind of change in thinking across the board from the analyst?
Because, you know for decades the bear case with any memory player and with Micron across the board was that it is a commodity. And fabs will over supply, margins will collapse, and this is this boom-bust cycle kind of mentality that these companies have been held against and what is holding it kind of held back some of the numbers and the ratings for Micron in the past, the price targets in the past.
That has changed completely. And I think it changed from what some of the comments that uh their their CEO said in their investor in their prepared calls yesterday. And it's all related to the strategic agreements or the customer agreements. And I want to walk through some of that and just talk about some of the strength overall.
But, let me get down into it. And I think it's right here, starting here around the business model transformation and the strategic customer agreements. So you can see Micron has been we talked about it a little last night but Micron has been a pioneer in our industry creating a new class of strategic customer agreements or SCAs with very robust terms and we were announced we they were proud to announce they completed 16 of these with customers across data center, consumer, and automotive segments the auto auto market segments.
And these uh strategic customer agreements accelerate the transformation of the business, enhance partnership technology and innovation, and provide customers with contracted uh supply assurance. So this was a big deal and we talked a little bit about it last night how I shared with you that these are top tier hyperscalers, consumer giants, and automotive manufacturers.
So it really is a diversity across Micron's clients that are signing these agreements. They're not just the data center clients and that's important to know as well because these are broad multi-year take or pay infrastructure contracts. I love that. Micron is guaranteed the revenue visibility. You either take it or you're going to pay for it either way.
That's how much power and leverage they have in the marketplace right now. And that's running through 2030 across the board. So when these are fully executed half or more of Micron's total revenue will be locked into these contracts. But here's the kicker I didn't talk about last night a a bit as well and let me see if I can find it it it where it is he calls it out.
And here it's around the pricing bands um because these contracts are structured with definitive price excuse me with defined price ceilings but more importantly they have strict price floors. The CEO explicitly stated on the call that for our strategic customer agreements with price bands the floor the floor price enables a very robust gross margin for Micron well above peak quarterly margins in any past cycle.
Let that sink in what the CEO just said. In a worst-case economic downturn, Micron's guaranteed minimum floor price margin, it will outperform the peak margin of any boom historic boom cycle. Hyperscalers are so terrified of getting locked out of advanced memory layers and high-bandwidth configurations that 14 of these agreements already represent a guaranteed 100 billion revenue backlog.
To secure these cal allocations, I talked about this last night. The tier one customers have guaranteed or handed Micron 22 billion in upfront financial commitments, including 18 billion in cash pure cash deposits. Big tech is literally financing Micron's capex to ensure that their AI clusters don't sit empty.
And to go deeper than the contracts, we need to talk about the architectural shift that is driving this insane demand. And I think this is the shift of why we're seeing Micron and SanDisk this explode significantly higher than what we saw with Western Digital and Seagate today. Cuz this is the dawn of the agentic AI.
And let me find that piece for you as well. If we just go Oh, sorry. It's right down here. It's to the data center piece where Sanjay kind of went through this as well. And you can see it right here. I'm going to highlight it and then we'll walk through it together. But he says the agentic AI is structurally reshaping data center infrastructure.
It's extending beyond accelerator-only racks to include CPU racks for the agent control plane and program execution and storage racks for rapidly expanding context store. We now expect calendar 26 industry server units to grow high teens above our prior expectations. And down here further, you can see this is really probably drove not only Micron and SanDisk is that in NAND AI context memory storage and HDD displacement opportunities are expanding the total addressable market for SSDs.
So, that is very strong language, I think bullish language across the board about what we're going to see with the agentic AI overall. When it When Sanjay dropped that piece in there, I don't think many people picked up on RAM with it. We did see a partnership that I'm going to get to in a second, a new partnership that also starts to show us that we are shifting more and more towards the agentic form of AI, the agentic AI era, let's say, moving away from just the training era that where compute just dominated everything.
We know when we get to agentic, the the GPU to CPU ratios dramatically shift as well, but the memory need and the drive for memory stays the same. If you want to see another real-world example of this happening, this partnership that got announced in real time, let me pull that up. We can walk through what was called out yesterday as well.
It's a new partnership, you can see on your screen with Qualcomm and Meta. So, Qualcomm announced this at their Investor 2026 Day. They're unveiling that they They unveiled that their custom Dragonfly C1000 data center CPU. It's a chiplet architecture. It's boasting over 250 cores, specifically optimized for agentic AI orchestration and low-latency interactive workloads.
Let's walk through and I can show you what the the uh it actually called out. You can see here, their Dragonfly uh uh C1000 data center CPU secured Meta Platforms as their first major customer, announcing a strategic multi-generation supply agreement today at their Investor Day. Under the deal, Qualcomm will supply Dragon C1000 CPUs to power Meta's next-generation server fleet, with production scheduled to begin in the second half of 2028, according to the joint announcements.
Financial terms, including volume commitments or pricing benchmarks or benchmarks, were not disclosed. The Dragon portfolio also encompasses AI accelerators alongside the C the C1000, with Qualcomm framing the broader lineup around what it calls the agentic AI era and rack-scale infrastructure. So, this is another example I think what the Micron CEO called out.
Now we see what Qualcomm is doing. There's no question in my mind that we are shifting into this agentic era across the board. This completely changes the calculus for memory because Qualcomm's data center entry highlights that the industry's requires a massive parallel expansion of the hardware system.
Micron confirmed this shift is driving 2026 server unit growth into the high teen percentile, up violently from the original forecast of low double digits. Furthermore, when you look at the massive read-through for SanDisk and what we saw today, when agentic nodes are constantly logging, reading, and storing real-world context data, they require an insatiable demand for high-density enterprise flash memory.
Micron confirmed that their data center SSD revenue in their earnings, they confirmed that it doubled sequentially up over 5 billion in this most recent quarter. And this is exactly why we saw SanDisk, it went rocket today, why it exploded today for over $400 a share. It's up over 22% today because the market realizes that AI context storage is now a a premium strategic asset.
So, what was the ultimate takeaway today that we need to know for our portfolios and moving forward across the board? Because I think what we saw today with the rerating of the memory sector and what we saw today with Micron and SanDisk just taking off, it is showing us that institutional money is aggressively locking up the physical plumbing of the entire ecosystem because agentic AI cannot physically function without a massive structural expansion of memory capacity and storage bandwidth.
And if you think a supply glut is any is coming anytime soon to ruin the party, let me just remind you what Micron CEO said in his investor call as well. And you can see right here, I'm going to just highlight and we'll read through. He says, "With respect to supply, our customers are recognizing that supply shortages in memory and storage take considerable time to improve.
And we even at that, we expect industry supply to improve gradually in 2028. We currently do not have a line of sight as to when memory supply will be able to catch up with increasing demand." So, that's the words directly from the CEO that they put out. They don't say those types of of comments very lightly.
They know this is forward-looking guidance that they're giving. So, they are very measured when they give this type of comments, guys. So, supply, I don't have any concern about a supply glut coming anytime soon. So, guys, the data center infrastructure boom that we've all seen, that was phase one. The real structural supercycle that is being triggered right now is all around the era of the agentic AI.
And when AI moves to the edge devices such as smartphones, tablets, autonomous driving, robotics. Remember, Micron CEO said that robotic is going to need 10x the amount of memory than autonomous vehicles does does as well. It'll just continue to prove to the market that the memory is no longer a cyclical commodity trade.
It has become a high-margin take or pay infrastructure utility. The hard numbers on today's screen show that the memory sector is real, it is being re-rated in time. Performance that we saw with Micron dropped on the street just proved the thesis completely overall. It also shows us that the pricing power is locked in for these companies.
The institutional accumulation that we saw today, it is in full effect moving forward. Now, we may see some profit taking like I saw like I said in the beginning of the video, these stocks had such an explosion today, you'll probably see some algorithmic selling at the beginning of the day, but try to block out all of that retail noise.
Continue to follow the signals in the market cuz right now all the signals are pointing in one direct direction for this memory sector. The fundamentals are real with these companies, the demand is real, demand will continue to outstrip supply into 2028. Guys, this is a great time to be in the memory sector.
I hope you enjoyed the video tonight. Give me a like, give me a subscribe, and I'll catch you on the next one.
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