Why Micron Stock Is Down, Don’t Buy Until You Watch This, Best Stocks to Buy Now

So, Micron just absolutely crushed earnings last night. Yet, the stock is slightly down. And you're asking yourself, what is going on? Why is Micron stock not moving? Why isn't it going up? And I will say this before I even get started, guys, you won't see this again more than likely in your lifetime. What am I talking about? I am talking about the fact that they crush earnings 379% year-over-year. Now, how often do you see 379% year-over-year? This is such a an odd rarity because of this AI cycle. And I said last night in Discord, I highly doubt we'll live to see another print 379% growth and not be up massively after earnings in our lifetime. Crazy times, especially looking at valuation. On paper, Micron doesn't look expensive at all. I think if you give it time, there's a good chance you'll see over $1,500. Why do I say that? Well, I'm going to explain, but I'm not alone here. You know, Wall Street analysts are saying $1,600, 1,500, 2100, 17 or $1,850. Actually, of course, this is never a guarantee. It's never financial advice. You shouldn't buy or sell just because Wall Street analysts are telling you the stock should be higher. But you're seeing a range here of $1,500 to $2,100. And these keep coming out as the day goes on. You just keep seeing the price targets get upped by these analysts. So, what in the world is going on with Micron? probably own it and you're stop you're stopping by to check out what what I think about Micron and why it's going down. So first of all if you look at the growth 379% year-over-year I mean that is absolutely just eye popping non-GAAP EPS so 30 $3342 that beat by $160 that's really strong and then that revenue 54.23 23 billion that beat by $2.76 billion. Now, if you look at guidance, of course, that's always going to be important. A lot of times you'll see a company beat on the top and bottom lines and then maybe the guidance is a little bit cloudy or it's light. In this case, the forward guidance, Micron provided exceptionally strong revenue guidance, 61.5 billion at the midpoint, which is 6.8% higher than analyst consensus expectations. So, you can say that this stock is priced for perfection. it was expecting this and that. Expectations were already really high and Micron had a high bar and it jumped over that bar and exceeded those expectations. Now, let me explain. There's one primary driver of why this stock's not moving. And I'm going to get to that and it ties to what I'm talking about right now and that's going to be the whole AI cycle and cyclical nature of semiconductors, especially memory. Now, most people that have been around for a while, they're going to think of Micron as something that's very cyclical. And historically that's been true. But on December 3rd, 2025, Micron decided to focus all of its resources on B2P enterprise and really AI data centers. And this business segment was called Crucial. Product shipments to consumer retail channels ceased at the end of Micron's second fiscal quarter February 2026, months ago. So before this strategic shift, PCs and servers were 35 to 40% of revenue. Smartphones 25 to 30% and then you had solid state storage. Now they're saying, "Hey, we're all in on data center." And this is going to have a very different cycle than when you think of consumer electronic cyclical behaviors and so on. They basically scrapped that whole thing about a year year and a half ago and said, "Hey, we're going to focus specifically on B2B and data center." And so what we really need to understand is when you look at this HBM4, it's ramping twice as fast as the previous version. Now this is good. What we need to know is what is the supply output and what contracts have already been committed. So 75% of 2027 output is already committed. That's a big number. If you look deeper at some of these analyst price targets and why they're saying it should be higher, they're saying that these strategic customer agreements SCAS now extend all the way to calendar year 2031 with remaining performance obligations reaching 150 billion. the market, sentiment of the market and AI hates this RPO. Oracle is a great example, but $150 billion in customer cash deposits growing to 32 billion. So, the fear though is that for some reason this cycle is going to end and that there's going to be a ton of competition. It's going to be commoditized and the margins are going to get pushed down. Now, what's crazy about that is you've got margins, this Q1 gross margin about 86.25%. And if you're looking for reasons why the stock's down, you say, "Well, this is a slight drop from 87% achieved in the prior in the prior quarter, I you're talking about 75%." And this is a still a really high number. Most companies would dream of having 86.25%. So there's still pricing power. And these contracts, they're contracts where these customers are obligated to pay. It's not something like, "Is there always a chance that RPO doesn't doesn't fill?" Sure, but the chances of that are very low. A lot of the price action comes down to sentiment and ignorance. And I'm going to explain exactly what I mean. Now, the sentiment comes from the fact that everybody believes that there's this cyclical nature and there's no way the stock can go higher because in part of it's because the stock's already ripped. If you look at the chart, you know, today we're actually down 3.4%. If I look at year to date though, it is up 260%. over the past year it's up 465% and it's up 1,347% in the past five years. So part of it is because you have this and anytime you have a massive jump like this you know people are going to be more cautious. Now the problem with that when you look at the valuation the valuation supports this parabolic technical run if the if the valuation and a lot of times the valuation doesn't support this. It's just people momentum trading, FOMO chasing into stocks, but the valuation doesn't make sense. In this case, guys, the valuation is very low. So based on this year's estimates, the PE ratio here is a 6.44 for Micron. Now, they just beat and they raised guidance. So this number is actually going to be lower. It's probably closer to a six. The industry average for semiconductors is going to be a 39.86. Companies like AMD are trading at over a 100. Intel at 78.79 and you've got Western Digital at 21.87. So you could say, well, this is different, you know, Infabas is different, Nvidia is different, AMD is different, margin profiles, this that this has high margin profile. It has all the things you want. The problem sentiment and misunderstanding or ignorance of what the cyclical nature of this company is now versus historically. Because Western Digital guys, this is storage and it's trading at a 21.87. Could you argue that Micron should be trading similar to that? You could easily make that argument. Even if you said, "Well, maybe not. Maybe not 21.87, maybe half of that." Well, do the math. Even if you get to a 10, if it's at a six now, you've got some upside to this stock. And the chances of seeing some of those analyst price targets are probably pretty good, but nothing's ever guaranteed. Of course, not financial advice. So the sentiment is that the numbers were excellent but the stock had already tripled this year. So a lot was priced in. Okay, that makes sense. But again, the fundamentals support a higher valuation. We believe the results confirm that demand for memory is still running hot. What decides where it goes next is whether memory prices stay high into 2027. You don't really have much a choice. There's already a contract on it. People will say, "Well, RPO, remaining performance obligation, $150 billion." But that's fine. You know, customers could just cancel or competition could steal clients. The chances of that are actually pretty low. While some skeptical Wall Street analysts have raised questions about how ironclad these multi-year contracts would be, let's look at the actual data. The legal shield, the rigid take or pay clauses. Every single one of these 26 strategic customer agreements that Micron has is structured with non-cancellable take or pay terms under this legal framework. The customer commits to an annual volume of memory. If their own demand drops and they choose to not take physical delivery of these memory chips, they're legally obligated to pay for them anyways. Do people know this? Do traders know the facts before they go and post on a random board, oh, lot was priced in? Okay. Well, based on what? Yes, the stock has gone up. So, there is that. Anytime a stock rips, you have to be careful. People are very cautious. They don't want to FOMO chase. They don't want to be the bag holder, right? But Micron's also not relying on a handshake. They forced their largest customers to put $32 billion in financial commitments and upfront cash deposits. People need memory because again, we went from train. If you watched the video last week of Levana from Spear Alpha SPRX ETF, we've gone and this has been a process, right? We bought Micron back December 2024 was the first time we recommended Micron on this channel. So, if you're not subscribe, do yourself a favor. Hit that subscribe button right now. And make sure if you are subscribed, you click that bell because a lot of people miss videos. The algo doesn't always put these videos in front of you. That bell is going to allow you to get notifications so you don't miss the next video. But we've gone from training to inference. And with inference, you're going to need memory. You're going to need CPUs. You're going to need storage. You're going to need edge cloud. We've been talking about all these things for years. That cycle, of course, is going to have an end. Capex at some point's going to dry up. But what we can do is look at the data and say, is that going to happen anytime soon? And based on these agreements, the RPO, what we see from these earnings reports, we have visibility well into 2027, 2028, and even 2031. We have we have visibility into 2031. This is what usually Wall Street deems as a layup. In this case, it's not because of the sentiment and really the misunderstanding because the thing is these deposits act as collateral. If a client fails to purchase their agreed upon annual aotment, Micron does not have to chase them in court to get paid, they simply take the cash directly from the customer's deposit balance. The risk is very low. It's not like they have a collection they have to go after. They already have the cash. And they just say, "Hey, I'm going to use this cash because you didn't do what you say you're going to do." These contracts are very, very micron friendly. If you don't work in contracts, you're not a lawyer. This stuff might be over your head, but I'm trying to bring it to you in simple terms to make it easy to understand and digest. Historically, customers walked away from memory contracts because spot prices would crash by 80%. This is something that Avon and I talked about on the stream last week, making it cheaper to break a contract and buy on the open market. Micron eliminated this incentive by embedding price bands with absolute floors and ceilings into roughly threearters of the RPO value. The more you research on this, the more failproof and bulletproof Micron has made these contracts to benefit them and shareholders, which is you. So even if the broader market enters a severe downturn, like say there's a bunch of competition that floods the market and tries to commoditize it, the price floor guarantees a highly profitable margin for Micron. Either way, and we have visibility that goes years out. On top of that, swapping to a competitor is practically impossible. You can't just swap easily to Samsung or SKHEX because of this technological lock in. Micron co-engineers custom memory architecture directly alongside it's built with hyperscalers and designers like Nvidia. So this is customuilt to the environments. You can't just plug and play something else as easily. People misconstrue. It's again it's ignorance where they think it's the same as a you know just regular old memory that you might need in a electronic device or something like that. This is not your mom and pops Micron. This is a completely different company. Is there going to be a cycle? Yes. Is there a cyclical nature? Yes. But we need to understand what exactly that means. And it's a lot different than what 95% of the market perceives it to be. You can't hot swap a custom molded Micron HPM module for a Samsung mid-production cycle without entirely redesigning the base system architecture. That takes years and and costs billions. I worked in software for over a decade. I've been investing in the markets for nearly 30 years. One thing I love as an investor is when you have this stickiness where it's very hard to rip and replace software, if you have Oracle ERP installed, it's really complicated, really hard and really expensive to rip and replace Oracle and put SAP in. If you're an SI, if you're a consultant, if you're in software, you know exactly what I'm talking about. And on top of that, all their competition like Samsung and SKHENX are also entirely sold out. There is there's nothing there. And of course, someone's got to make this, right? So Taiwan Semiconductor TSM, they're they're the foundry making most of this, right? And there's a few others, right? But you can't just invent a memory company overnight and say, I'm going to compete with Micron and just plug and play and make it commoditized. If you understand this, it's not what you think it might be, or I should say what the market thinks it is. The primary risk here is the macroeconomic default where an RPO might not get filled if one of their global tech giants that has one of these strategic contracts these seas goes and solve it or files bankruptcy. If you look at the customers of the 26 names I don't see those companies going out of business in the next couple of years. So if your time frame is the next one or two years and you don't already own Micron, it could be your huckleberry. Is it something I want to buy and hold forever? No. Is it something that I want to buy and hold and continuously monitor and research like we're doing right now? The answer for me is absolutely yes. Now, when you look at the profitability grade for Micron and Seeking Alpha, it's an A+. Now, that gross profit margin, the TTM is going to be 72%. It's bringing in $952,000 net per employee, which is a great number. Of course, growth is just off the charts. A+ A+ profitability, A+ growth, A+ valuation. Name a time in your life that you've seen a stock have A+ for valuation, growth, probab profitability, and momentum. I don't think I've ever seen it. Like I said again earlier, in our lifetime, we might not see something like this ever again. And of course, when everybody's on the same side of the fence, right? Everybody says buy, strong buy, strong buy. You know, generally that's a little bit scary. When everybody's on one side of the bus, the bus tips over. And so there's a there's just a lot of sentiment to think, man, this stock's really expensive. It's it's ripped really hard. There's no way it can go a lot higher. You know, it's now in the $1 trillion, you know, $1 trillion market cap club, 1.2 trillion. The upside's very limited. I would sit here and argue. I don't know. I mean, I get what you're what you're saying, but do you know all the information that we just talked about in this video? Have you looked at the A+ profitability, growth, valuation? You know, it does pay a tiny dividend. It's not even relevant, but this company is crushing it. And yes, it's in a cycle, but this cycle is very unique and it's a cycle we probably won't see again in our lifetime. So, the question that you have is, should I buy the stock now? And of course, I can't give financial advice. What I can tell you is Wall Street analysts, there are 25 analysts covering and this is going to get updated because this is not updated since earnings last night. But before earnings, it was 24 buy, one hold, zero sell. And if you look at the highest price target on the street, 2,200, lowest 1,200, it's 1,041. So even if you if you get it at a,000,000, there's still going to be a 20% upside, 15 20% upside to that. And this average price target is going to be $1,563. That's a 50% upside. Is that guaranteed? No. Is it financial advice? No. Is it a reason to buy or sell? No. It's just one tool in the tool belt. It's just information that's good to know that other people think the stock could be worth more in a 12-month price target. Now, generally speaking, this is full disclosure here. When I see a chart that looks like this, and we do chart day every single Wednesday at 9:00 a.m. Eastern in the private community, I'll tell people every week, don't chase air pockets. No FOMO chasing. FOMO Chasers LLC, you know, be careful FOMO chasing. You don't want to buy a stock that's parabolic. You know, 50% retracement. And honestly, most of the time you see 50% retracements where you take this number and this number probably comes into here, but yet the fundamentals support the stock being this high. So the problem is that the technicals want this stock to come back to the 200 day simple moving average because that's what stocks always want to do and that's something like $670. The problem is is if you look at the actual fundamentals, the fundamentals support a higher stock price. So this Fibonacci R3 is 1231 and your risk is really going to be down here. Something like potentially a 200 day simple moving average because the momentum is A+. You probably don't get past the 50 or the 100. And you also have that psychological floor of about $1,000. So both of these moving averages are closer to 950 960. And you have that $1,000 psychological floor. The stock's trading right now at,041. Could it go lower? Sure. Is it possible you come down and you test 900 or maybe even come down and you wash out to 750? I think that that absolutely could happen. And again, it's not financial advice. Nobody knows for sure. But if I don't own the stock and I think the stock's worth, 1,500 to 2,000, maybe if you don't already own it and it dips a little bit lower, maybe it's a position, an entry position, take a starter position and dollar cost average using this information as a guideline. And this is going to be tricky because if you buy a little bit and you don't fill the position, it could do that. You know, if you if you go too heavy here, it could also do that and now you're down. But if you're thinking long term and you're willing to hold one or two years, buy, hold, and monitor, I do think that you have possibility of making 50% or more. Again, that's not financial advice. Nobody knows for sure. This is what Wall Street analysts are telling us, right? I just showed you information right here. Wall Street analyst average price target is 1563. As always guys, make sure you do your own homework, do your own research. Nothing I say is financial advice. This is just what I see, real talk, opinions, facts, and data that I want to share with you to help you be a better investor. And if this is helpful, make sure you do drop a like, drop a comment, subscribe if you haven't already. Have a great rest of your day. We'll see you.