저자: LouWhiteman및공동진행자 · 외국인
요약 보기
마이크론은 23% 하락 후 선행 PER 약 5배로 저평가처럼 보이나, 중국 CXMT 등 공급 증가와 2028년 이후 공급 확대 가능성이 장기 리스크로 지적됨. HBM으로 DRAM 웨이퍼가 전용되며 현재 공급 부족이 있으나 고마진(매출총이익률 87%)은 메모리 특성상 평균회귀 가능성이 큼. 단기는 호실적·35억달러 자사주 매입 기대로 강세 시나리오가 우세, 장기는 하락 추세 우려. 두 입장 모두 근거가 있다고 결론. 변동성도 매우 큼(올해 5% 이상 변동 45회).
다듬은 글
Micron shares have fallen 23%, and many investors believe that this is a bargain price since they trade at just five times forward earnings . But, Lou, the main question for us today is: should we buy them now, or have we already peaked with Micron? Let's figure it out. First of all, from a supply perspective, one of the things that affects Micron stock in the short term is the increase in supply in the market.
There is a Chinese company called CXMT that has announced that it will produce more products not only this year, but also next year. This concerns the supply side. Do you think the Chinese memory supplier should even be considered when you evaluate Micron stock? Yes, I think it's almost inevitable. They may not be able to compete for all the business, but we are talking about the overall market, and any part of it under pressure will raise questions about demand.
So, yes, Micron fell, but so what ? They have grown by over 500% in the last year thanks to this almost unlimited demand. If another player emerges to compete for at least a portion of that, it should change the economics of the business, period. Well, another aspect on the supply side is that no one is standing still .
You know, in the current quarter, the third quarter of 2026, maybe even early 2027, no one is increasing supply much; but closer to the end of 2027, in 2028-2029, Micron will suddenly start increasing supply, SK Hynix will increase it, Samsung, at least one or two Chinese suppliers will appear and bring more products to the market.
So, we keep hearing about demand exceeding supply , but it looks like there's a lot of new stuff coming out on the supply side that's going to fundamentally change that formula. True. And you know, in the long run, it gets even worse, because...I mean, the demand for AI could go on forever. Let's hope that's the case , right?
For the sake of the stock markets and all those stocks. But to some extent, Micron's core business is regular memory, whether it's for the iPod or all the other products that need it. Yes. Yes. Yes. And to the extent that even if CXMT just displaces them, that's your long-term customer who could be gone.
I don't think Apple will say, "Okay, my mistake. We'll just get back to you if you want." If Apple establishes relationships and is able to source supplies from third parties, I don't think it's guaranteed that this business will ever come back. So, increasingly, you're not just benefiting from the growth of AI if you're a Micron shareholder, you're depending on it if some of the other business goes somewhere else, which I think changes the outlook for the stock in the long term .
So, another thing I want to emphasize from a supply perspective is that we talk a lot about HBM, or high-bandwidth memory , and essentially you take three wafers. You know, from a supply perspective, uh, supply is limited by the number of wafers that these companies are able to produce. You take three of them from DRAM and convert them to HBM.
This is oversimplified, but from a pure supply and demand perspective, uh, that's why we don't have enough chips to make more iPhones, why computer prices are going up, and so on . This is not because there is less DRAM potentially available, but because this DRAM is going to HBM, and that is what is in such high demand.
So you're saying that the gap that Micron and other companies are leaving behind in DRAM will be filled by someone else. Yes, it will initially be filled in China, but these products may eventually make their way into the products we know today. One other thing I want to emphasize, because we'll get to things like margins and their potential profitability in a moment, but the demand side, I think, is also something that we don't talk about enough .
We know we are currently limited in supply, but each of these demand sources, whether it's Apple or Nvidia, has its own strategy. Of course? So you can't make changes in March 2026 that will affect how much RAM or memory overall will go into your product in September 2026, but you can make changes that will affect your product in 2027, 2028, 2029 .
So what do you think about this from the demand side, as these prices have increased in some cases by 500, 600%? Will we see this demand start to subside a little bit as these companies say, " You know what? Maybe, maybe we'll put a little more DRAM instead of HBM in our products. Maybe we'll re-engineer our processors a little bit differently to use less of this very expensive component." To what extent they will be able to do it.
And look, I'll be frank. I don't think I know enough to predict the future and say what will happen, but the point you're making, and one that investors should think about , is that as costs rise, you incentivize smart people to look for workarounds. Will they be able to do it completely? Honestly, I doubt it.
I think there's a reason why they're using these high-bandwidth products , and to some extent it's necessary, but can we find ways to use them a little less or change the approach because of the margin? Again, the higher the price and the greater the shortage, the more you incentivize smart people to look for solutions for your margins.
And I think that while we can't predict the outcome, investors should at least take it into account . One of the issues we often discuss here is the margin of such products. We have seen that during the development of AI, the margins of many companies simply skyrocketed. This schedule covers the period from November 2023.
These are quarterly figures . Blue indicates gross profit. So we've reached 87%, meaning for every dollar of sales, Micron gets 87 cents in gross profit. 81 cents of that is operating profit . Just a few years ago, in the November 2023 quarter, even gross profit was negative. If we go back to 2015, these are margin levels we have never seen before.
When you think about these margin levels in the long term (you could add many companies like Nvidia here), do you think there will be a reversion to the mean where in a 3-6 year perspective we get back to 20, 30 or 40% margins? Operating profit may decrease. Is n't this typical for such cyclical industries?
It seems so. I don't want to be the one to say that this time is different, because I don't think the situation will change in the coming quarters. It may be different now, but in the long run I can't imagine anything changing. You already said it. Traditionally, this is a business with a high level of commoditization.
There is something else: the "bullish" scenario now is that a significant part of the new supply will not arrive before 2028. The " bearish" scenario is that 2028 is almost here , and this is happening. It becomes speculative impulse trading rather than long-term investment in a world like this, and I find it hard to believe that numbers they could never consistently generate in the past are the new normal just because they achieved them.
This is probably the least likely scenario, in my opinion . Okay, we'll get to the valuation in a moment, but let's look at the bullish and bearish scenarios. What is the bullish scenario for Micron at this point? Is it just about operations? There should be a share buyback component. I don't think they'll be able to launch it before the end of the year because of some of the funding they got from the US government, but heck, if you're buying back shares at five times earnings, that could be pretty attractive.
When you look at whether the stock will go from about $922 at the time of writing to $1,500–$2,000, what should happen? So, the "bullish" scenario is the results on the scoreboard, right? I mean, the bullish scenario is a continuation of the same thing . They had $54 billion in revenue last quarter.
That's a 380% increase, it seems, year-over-year . Adjusted earnings per share just skyrocket with those margins. The forecast predicts even more. They seem to be forecasting 61 billion versus the roughly 57 that analysts were expecting. You still have limited supply chains. You are still in huge demand.
And yes, I think there is a $35 billion buyback planned that should begin in the near future. With such margins, you can buy back your shares. So, the " bullish" scenario now—let it continue. Yes, and I think just to emphasize this, most of the companies that we talk about in the context of AI development are not showing any signs of slowing down yet.
We might criticize this in a moment, but if you look at Alphabet, Amazon, Nvidia, all these companies that are either making chips or buying chips, they're saying, "Hey, more, more, more, more, more." And that means more memory. The other part of this is that even if HBM isn't very strong, there's still a huge consumer demand that needs to be met.
More and more consumer devices are constantly emerging that require memory. So, at least for the next 12 months or so, there will be little new supply coming to the market. A certain part of this proposal will appear. Maybe it will even provide long-term growth for these companies, by " long-term" I mean the next three to five years.
I think it's pretty hard to predict what's going to happen in five or more years, but it should be a good period for Micron. Okay, let's consider the pessimistic scenario. If stocks continue to fall, what do you think is the reason for this? We've already mentioned a few things, but to emphasize our point: competition is growing, and Chinese players— this week was just a reminder that competition exists, it was n't a big surprise.
But whether it's Samsung, or Hynix, or Chinese companies, or anyone else, over time the supply in the system will simply become more. We have already said that the memory market is cyclical. He has always been like this. I think he will remain that way. This is partly because more supply may become available.
As everyone ramps up volume, capital expenditures increase along with revenue. Now they can afford it. It's time to invest in your business. Another thing, as an investor, you should understand that volatility is the norm right now. I quickly checked this. This year, Micron shares have changed in price by more than 5% 45 times.
45 cases of price changes of more than 5% in one day . This is not an asset that can be called " safe for widows and orphans." We must emphasize the aspect of competition, because the uniqueness of the situation before 2026 was that it was an oligopoly. It's a bit like the US telecommunications industry, isn't it?
There are three main suppliers. They can operate on the principle of " wink, hint", you know? Let's keep the offer at the current level. Let's keep those margins very high. Things are all going very well for us. I think these Chinese suppliers are so interesting right now and pose such a bearish threat because they don't operate on this " wink, hint" principle.
They operate on the principle: " Oh my God, we see profits here." We can go and get some of those profits. And these Chinese manufacturers have a completely different incentive structure than many of the American or South Korean companies that once built the industry we know today. So they're maybe less focused on short-term or long-term profit, you know, they're willing to lower those margins.
We've seen this with computers, haven't we ? Computers that used to be made in South Dakota are now made in Asia because they're willing to do it at a much lower margin, like Foxconn. This is how this business was built. So I think it's something to keep an eye on because in a few years we can look back and say, "Hey, Micron still has this HBM business.
It may not be quite the 87% margins that we have today, but it's still a great business with a 65% margin." But they completely surrendered the DRAM market, allowing other suppliers to come in there. I am leaning towards a bearish view on these companies as their growth has been very strong. The market looks 18-24 months ahead.
This market doesn't really care much about what happens next quarter. The results will be excellent. Come on, let's emphasize this again. This is not the kind of company that will report a bad quarter next time or even early next year. Are you on the side of bulls or bears, looking at the 3-5 year horizon?
I think it's harder to be optimistic the longer your forecast is. I have no doubt that impulse traders can benefit now. But yeah, the further you look, the more I think... Listen, my best advice to investors is to focus on the future, but remember the past. And in this case, I believe the past indicates that the long-term trajectory is downward.
But listen, it works until it stops working. And in the short term, I think this could be a good opportunity to buy on impulse this week. Yes, let's see. I think there are strong arguments for both bears and bulls. Well, let us know whose side you're on in the comments below. Don't forget to subscribe to The Motley Fool channel here on YouTube. Thank you all for watching. See you next time.
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