Micron Technology (MU)

All the chip stocks have been dead money the last 3 months, but MU is coming back to life.

Is a major holding for him. Trades at 13x PE now and maybe 6x next year. Cheap.

Biggest competitors are SK Hynix and Samsung. Extremely cyclical, and that's the risk. You need to buy at the bottom of the cycle; that's actually when the valuation screens high, because it's related to very low earnings.

Key is to look not at the multiple, but at the earnings trajectory and how many years that will last. She believes we're past the mid-cycle, so it's riskier. She wouldn't oppose using it as a trade.

Owns both. Likes both, but for different reasons. Complement each other in a portfolio. Recently added to MU on pullback.

MU makes memory chips. More cyclical. When demand and pricing are strong, can be a lot more earnings upside. A bit more torque in the current AI memory cycle.

TSM manufactures advanced chip design. Steadier, higher-quality manufacturing platform. Sits at the centre of almost the entire semiconductor ecosystem. Tradeoff is geopolitical risk, with most of advanced production concentrated in Taiwan.

Micron has momentum. Nvidia's report a blow-out today and will lift Micron higher. 

He wishes he knew :)  The future is digital, technology, cybersecurity. To the extent that it can grow market share in that environment, it can outperform. Analysts saying it'll "Outperform" means that it'll outperform the basket of similar companies.

Well-liked. But compared to a year ago, it's gone up 10x. Sustainable? Absolutely not. Can't tell if it's over. At a high-risk point -- if it misfires, it'll correct in a big way.

It wants to innovate and bring out the best semis, even if it costs a lot. He likes this strategy. It's up 210% the fourth-biggest gainer on the S&P.

Why are you looking at a name that's had its trajectory? Yes, a very good company. Yes, exposed to AI. But what happens if investors decide they just don't want to pay for AI productivity or if the capex spend slows?

ETFs represent mindless buying, agnostic to valuation. If the index weight of a name increases, the ETF just buys. So valuations move completely away from the fundamentals. Big hedge funds are trading these names against those flows. Eventually there will be an oversupply, which takes 6-9 months to work through, and the ETFs mask this -- very dangerous.

Be careful chasing names that have had big moves up.

(Note the short timeframe.)  Pulled back in July along with other names, has retraced about half. Valuation's getting cheaper because earnings are blowing estimates out of the water. Look at the long term, but remember it's cyclical. Important to look out for peak earnings, not just focus on the cheap valuation.

Doesn't know what to do with this. Semis is almost a play on the cyclicality of additional leverage on the growth on semis. Shares have moved up a lot. He expects their next numbers to be very strong but these companies are not about what they will make today or tomorrow, but in 2029? The memory space has positive tailwinds as the demand for memory keeps growing, but will that outgrow capacity? MIcron's revenue looks like it will peak in 2028 then flatline. What will happen after?

The chart is attempting to recover after a parabolic move this year. A correction is inevitable after a parabolic move--all the semis did. There's an okay chance of it returning to its old high, but it makes him nervous. He traded it twice recently.

Up 254% this year. He bought a position last week because he feels this industry has changed for the better. Though, he's uncomfortable buying a stock that's moved up this much. He thinks Micron can double before the storage boom ends. Their long-term agreements with customers are spectacular for margins. True, there's pushback from some towns against data centres, though other places want them.