To The Moon

$Micron Technology(MU)$

The global semiconductor landscape is once again in the spotlight, and Micron Technology (NASDAQ: MU) stands near the center of this next great wave. The company, known for designing, manufacturing, and selling memory and storage solutions that power everything from cloud data centers to smartphones, is scheduled to release its fiscal Q3 2025 earnings report after the closing bell on June 25.

Micron’s recovery over the past year has been impressive—but with the stock trading near recent highs and the broader market facing mounting macroeconomic and geopolitical uncertainty, investors are now asking one critical question: Should you buy Micron stock before the earnings report, or wait until after?

In this in-depth article, we’ll unpack Micron’s recent performance, the key catalysts to watch in the upcoming report, the long-term structural tailwinds from AI, and a fresh look at Micron’s valuation using discounted cash flow (DCF) modeling. We’ll also explore how Micron stacks up against peers like Nvidia, Intel, and AMD—and most importantly, help you decide whether now is the right time to add MU to your portfolio.

Setting the Stage: Micron’s Rebound from a Brutal Downturn

The semiconductor sector is cyclical by nature, and over the past few years, Micron has seen both ends of that cycle. After enduring a difficult stretch in 2022–2023 as memory prices collapsed and inventory levels surged, the company has emerged stronger and leaner.

In the most recent quarter, Micron posted results that surprised to the upside:

• Revenue reached $8 billion, up from $5.8 billion in the same period last year.

• Operating income surged to $1.77 billion, a nearly tenfold increase from just $191 million a year earlier.

• Operating margins expanded to 22%, up from a painful 3.3%.

This dramatic improvement in fundamentals marks a clear transition out of the downturn phase and into a new growth cycle—largely powered by the meteoric rise of AI-driven infrastructure investments.

The AI Supercycle: Fueling Micron’s Growth

One of the most exciting developments across the entire tech sector is the explosive demand for artificial intelligence and accelerated computing infrastructure. Whether it’s ChatGPT, autonomous vehicles, or AI-powered enterprise tools, the one constant is demand for high-bandwidth, high-density memory—Micron’s bread and butter.

Micron’s DRAM and NAND chips are vital to these new workloads, powering everything from GPU clusters in AI data centers to laptops and edge devices that now require dramatically higher compute capabilities. Unlike prior cycles where consumer electronics were the key growth driver, this cycle is being led by enterprise-level infrastructure transformation—which tends to be larger, longer-term, and more margin-accretive.

However, it’s worth pointing out that not all segments of the memory market are booming. Demand for legacy chips used in traditional laptops, smartphones, and desktops—those not designed for AI workloads—remains sluggish. Companies across the industry have been warning that non-AI demand is still flat or declining. That means Micron’s growth is increasingly dependent on the AI arms race, which could introduce volatility if that trend slows or becomes overly competitive.

CapEx Surge: A Bold Move for the Long Term

One of the biggest areas of investor focus in the upcoming earnings report will be Micron’s capital expenditure strategy.

In Q2, the company spent an eye-popping $3.1 billion on CapEx, which represents over 33% of total revenue. This money is being funneled into building state-of-the-art fabrication plants in Idaho and New York, part of Micron’s long-term commitment to onshore chip production and reduce dependency on foreign foundries.

That’s an aggressive strategy—especially considering these facilities won’t be operational for several years. It means that Micron is essentially placing a multi-billion-dollar bet on sustained, long-term demand for its memory products.

Understandably, this has made some investors nervous. But the good news is that Micron is funding these investments with internally generated cash, not debt. In the six months ending February 27, 2025, Micron generated $7.22 billion in operating cash flow and spent $7.3 billion on CapEx. That near 1-to-1 ratio shows a high degree of financial health and operational efficiency.

By contrast, Intel, which is also expanding its manufacturing footprint, is funding its CapEx through a mix of debt, subsidies, and balance sheet drawdowns—raising concerns about sustainability. Micron, in comparison, looks far more disciplined.

What to Expect in This Earnings Report

Micron’s management has guided for $8.8 billion in revenue for fiscal Q3 2025, a roughly 10% sequential increase. Based on demand trends and recent industry data, there’s a reasonable chance that Micron beats this estimate. AI tailwinds are still building, and Micron’s high-performance memory is central to many of these upgrades.

However, the bigger risk lies in profit margins.

Micron guided for gross margins of 35.5%, but rising costs across global supply chains and the reemergence of tariff-related disruptions could pressure margins. We’ve seen freight costs rise, raw material costs tick up, and geopolitical friction between the U.S., China, and the Middle East impact cross-border operations.

A revenue beat paired with a margin miss is a likely scenario—and that could result in a muted stock reaction, at least short term.

Valuation: What’s Micron Really Worth?

Despite the recent rally in Micron’s stock price, my DCF valuation model suggests that the stock remains modestly undervalued.

• Intrinsic value: $131 per share

• Current share price: ~$122

• Implied upside: ~7.4%

That’s not a huge discount, but it’s meaningful when you consider the stage of the cycle we’re in. Typically, memory stocks are best bought early in a new upcycle, when margins are expanding and supply/demand is tightening. That’s exactly where we are today.

Micron also trades at a forward price-to-earnings ratio of 13–14, which is well below the S&P 500 average and deeply discounted relative to high-growth peers like Nvidia (which trades at 35x–45x forward earnings). Given that Micron is participating in the same AI supercycle, this valuation gap may be unsustainable.

Fair Value Estimate (as of June 2025)

Based on a Discounted Cash Flow (DCF) model reflecting Micron’s improving fundamentals, AI-driven demand tailwinds, and heavy reinvestment into capacity expansion, here is a comprehensive fair value estimate:

Should You Buy Now or Wait?

This brings us to the core question: Buy before earnings or after?

There are two schools of thought here:

Buy Before Earnings (If You're Bullish)

If you believe Micron will beat both revenue and margin guidance—and that the market will reward that performance—then buying before earnings makes sense. This approach assumes that the AI tailwinds will continue to outweigh macro pressures in the short term.

Wait Until After Earnings (If You Prefer Caution)

If you’re concerned about margin compression, tariff risks, or broader market volatility—especially with global tensions escalating in the Middle East and continued uncertainty around tariffs—it might be more prudent to wait.

Personally, I’d suggest a blended approach. Consider buying a partial position ahead of earnings and keeping the rest in reserve. If the stock dips on margin pressures, you’ll be in a position to lower your cost basis. If it rallies, at least you’ll have some exposure to the upside.

Final Thoughts: Micron’s Role in the AI-Driven Future

Micron is no longer just a cyclical memory play—it’s becoming an increasingly strategic supplier in the AI computing stack. From high-bandwidth memory to AI-optimized DRAM, its products are essential building blocks of tomorrow’s digital infrastructure.

The company is executing well, maintaining financial discipline, expanding capacity, and participating in the most powerful trend in modern technology. Even though the stock isn’t trading at a steep discount today, its valuation remains attractive, especially relative to its long-term growth prospects.

So whether you buy before or after June 25th, Micron deserves a place on your radar. This is a company that’s not just surviving the AI revolution—it’s positioned to thrive in it.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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