Micron Technology (MU)

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.

You can add to this. We're not at the end of the cyclical trade, nowhere near. Buy dips during volatility.

He bought it 2 months ago and is flat, but likes it here now. The weakness after earnings was due to levered ETFs and margined accounts starting in Korea. But that's behind us. He thinks AI spending will continue. 

Very inexpensive. Sector is extremely cyclical, leading to major moves in stocks. Stock's starting to rebound here. You can start accumulating. Valuation is very attractive, as is the growth rate (159% says his terminal, so he'll have to check on that). Recent weakness could be due to profit-taking.

He recently bought two tranches, averaging $1,000, though today at $877. He thinks the cycle will be elongated, so buying MU at 6x forward PE with earnings growing through the roof. He doesn't believe demand for their chips will plummet. The hyperscalers' reports of late show only growth.

It has $20 EPS power. AVGO's AI semi pipeline is $100 billion. MU is a new position for her, small and volatile, but they have $100 billion in bookings for the rest of the year, a lot of contracts. They're in the sweet spot of the AI memory shortage.

He sold very early. He liked the management, but had no clue how acute the shortages were in AI. He took profits, and MU kept rallying. Happy to take profits, though.