The Market Isn’t Wrong About Micron -- Here’s Why

Join our weekly live Q&A for exclusive sessions like this one! https://chipstockinvestor.com/features-and-pricing#pricing Micron stock: why does a memory maker with capacity sold out through fiscal 2028 still trade at a ~13x P/E? In this video: why cyclical stocks often look cheapest near the top of a cycle, what a reverse DCF says Micron is pricing in, and how our normalized profit calculator reframes its valuation. A reverse DCF at today’s price implies just 4% annual EPS growth for three years, which is far below what Micron should earn next year alone. When we normalize instead (50% revenue CAGR, net margin easing from ~63% to 50%, 5% annual buybacks, and a 10x exit multiple), Micron looks more like a 17x stock, with a midpoint fair value around $1,700 per share. The market isn’t wrong. It’s pricing in three to five years of elevated profit and treating everything after that as a question mark. The thesis is a bet that the market will eventually reprice a better long-term outcome, and that’s why we’re still holding into 2027. Chapters 0:00 - Why Cyclical Stocks Look Cheapest at the Worst Time 1:00 - Viewer Question: Micron Sold Out Through 2028, So Is It Cheap? 1:45 - Using Normalized Profit for Companies That Are Over-Earning 2:30 - The Market Isn’t Wrong, It’s Pricing Probabilities 5:00 - Micron as a Memory IDM: The Boom-Bust Layer of the Supply Chain 6:50 - Why We’re Likely Not at Peak Memory Cycle Yet 7:30 - Reverse DCF: Where the Model Breaks for Micron 8:45 - Normalizing MU: 50% Revenue CAGR, Margins Down to 50% 11:00 - From 13x to 17x P/E and a Fair Value Range 13:00 - “This Time Is Different” and Why We’re Still Holding MU — LINKS & RESOURCES — Join Semi Insider — $120/year Semi Insider is Chip Stock Investor's paid research service: all research as it happens, the CSI 100 + quarterly outlook, dashboard tools (Compare Companies, Reverse DCF, supply-chain mapping), weekly live Q&A, portfolio moves before execution, and the private Discord. Join: htt