r/stockmarket
345% YoY revenue growth from Micron. Is this just the memory cycle or something bigger?
Micron's 345% YoY revenue growth sparks debate: is AI/HBM demand creating a durable structural shift or just another peak memory cycle?
- Staggering 345% YoY revenue growth is hard to ignore despite historical cyclicality.
- AI demand, particularly HBM and data centers, may create a more durable and structurally better cycle.
- Memory business is historically highly cyclical with boom/bust patterns.
- Current growth might just be a peak-cycle setup where margins and revenue eventually roll over.
Micron just reported 345% YoY revenue growth, which is honestly a staggering number.
I understand memory is highly cyclical, and Micron has always been a boom/bust type of business. But even accounting for cyclicality, this level of revenue growth is hard to ignore.
The bigger question to me is whether AI demand is creating a more durable cycle for memory, especially with HBM and data center demand becoming a larger part of the story.
Is this just another peak-cycle setup where margins and revenue eventually roll over, or is Micron entering a structurally better period than past cycles?
Curious how people are thinking about MUhere. Overhyped cyclical, or underappreciated AI beneficiary?
People are fine with them not diving in since they can afford to wait... For now.
Apple is unique to the rest of the mag7 in that they are a hardware and closed software business. They released a phone with "AI" capabilities that flopped and now pivoting to Google, and still it sold like crazy.
They are essentially the hedge if all this AI is overhyped as they didn't triple (or quadruple) their capex with no return. Although internally they use AI like crazy but that's a couple billion at most a rounding error.
Most non-investors of apple are asking what's next. You can't live off of peripherals and walled software forever. They probably could but at what valuation.
Their capacity is booked out for a couple of years. They are selling every scrap they can, at enterprise pricing. They shitcanned Crucial in an attempt the meet demand for ai. They are building fabs in the US, but those won't be online for a couple of years. So probably not a peak, but probably a couple of solid years ahead.
What's most shocking to me is how surprised everyone is they beat massively, grew massively, and guided massively considering we can basically trace every cent of this from the hyperscaler capex.
This entire cycle is a wealth transfer from hyperscalers to semiconductor companies. At some point, they will need to stop increasing CapEx at the rate they are, which will result in stagnation of earnings. Considering memory is a commodity, that might happen at the same time you get margin compression as supply demand balances.
Once again this all comes back to the CapEx. Do they keep increasing it? Or do we hit a point where supply-demand for compute comes into balance? My bet is on the latter given compute is also a commodity.
If you think the capex boom keeps accelerating: short capex spenders / long capex receivers.
If you believe in high school level macroeconomics: long capex spenders / short capex receivers.
This isn't really a hot take, the market has figured it out but has been heavily betting on the former. Not sure the exact number, but the correlation between IGV and SOX must be nearly -1 over the last 6 months.
Same. MU was my top conviction buy to by last summer.
Market is already punishing the hyperscalers. If they keep spending like toddlers with their daddy's credit card, they will see some insane punishment by the market.
But for now, we must goon.
It's a cycle. All of these semiconductor and memory stocks will revert to the mean. It's just a matter of when. This revenue and cash flow growth will stop and they will have a parabolic move down that is maybe even more violent than the move up.
It would be in trouble in a way that the large indexes are dragging it down, but from a company perspective they are unscathed. At worse they roll back their AI capabilities, which are currently at par with what they have now.
But yeah tech as a whole would come crashing down.
you use it for free, would you pay a lot of money to have access to it so AI companies can actually make money? The data says most people will not.
This time is different because the most valuable companies with insane cash flows are spending their money because losing the race to compute will determine the winners vs losers.
well that assumes spending money on AI will actually make you a winner instead of a massive loser if AI doesn't actually work out
But they will need it which is more demand.
Hey, after seeing your comment I looked into BOT (asuning you mean Robostrategy). While I do like what I see, their holdings etc., it kinda seems like a worse-valued ETF. Why buy BOT, rather than a regular ETF?
Yup you can see how spooked the markets were coming into their earnings. Even now people are taking profits on mu because they know it won’t last.
The reason consumer spending was cyclical still applies to datacenters. Consumers upgraded when there was a big new jump in performance. We are seeing a bunch of new build out right now, so a new type of cycle is being created, but it is still a cycle. Everyone has bought blackwell right now, so there has to be a significant justification in ROI to rip that out and install whatever new one nvidia creates. Maybe vera rubin offers that, but we don't really know yet.