Buy or Sell Micron Stock? (My Final Verdict) | MU Stock Deep Dive Part 4
Summary
Parkev provides a comprehensive outlook on Micron, focusing on growth drivers such as advanced driver assistance systems (ADAS) and humanoid robots. Level 2 vehicles contain five times the memory of standard cars, and robots could require ten times that amount by 2030. However, Parkev expresses concern that the company's 350% revenue growth was fueled by 60-80% price hikes rather than significant shipment increases. He notes that Micron achieved a historic operating margin of 81.2%, but expects this to normalize within a year or two as the industry adjusts.
On the supply side, Parkev mentions that new manufacturing sites in Idaho and Taiwan are expected to increase output between 2027 and 2028. Despite the business's strong momentum and multi-year strategic customer agreements, he believes the valuation is currently stretched with a forward P/E of 19.3. He also highlights the risk that major customers might seek to develop their own proprietary memory components to avoid supplier pricing power.
Mentioned Stocks
Reasoning: Parkev updated his fair value estimate to $1,115 per share, which remains below the current market price of $1,213. He is concerned that the recent massive revenue and margin growth is driven by cyclical price spikes rather than sustainable unit growth. He also notes a stretched valuation with a forward P/E of 19.3, the highest since July 2025.
Reasoning: Apple is mentioned as a major customer facing pricing pressure from suppliers like Micron, leading them to raise their own product prices. Parkev suggests this environment creates a risk that Apple might vertically integrate and develop its own memory components to mitigate supplier influence.