Siebert CIO Says Micron Stock Is a Buy, Just Not Forever
Key Summary
Micron Technology (MU) stock surged 4.06% on Wednesday, driven by strong quarterly earnings, but its long-term prospects remain uncertain due to potential AI capex slowdowns and supply chain pressures. Despite this, Siebert CIO Mark Malek sees the company as a 'buy' for now, citing its control of the AI ecosystem and reliance on Nvidia. Micron's growth is expected to continue, but investors should be cautious of potential risks.
Key Points
Micron Technology (MU) reported strong fiscal fourth-quarter revenue, beating its own $50 billion guidance, with gross margin reaching 87%. The company guided fiscal first-quarter 2027 revenue to $61.5 billion and has contracted the vast majority of its 2027 high-bandwidth memory (HBM) supply at higher prices.
Control of the AI Ecosystem
Siebert CIO Mark Malek sees Micron as a 'buy' for now, citing its control of the AI ecosystem and reliance on Nvidia. Nvidia's AI processors sit beside Micron's HBM4, which is used for the Vera Rubin platform. Micron is also co-developing a custom HBM4E version.
AI Capex and Supply Chain Risks
Malek warned that a slowdown in AI capex would hit the whole sector, with companies like Micron struggling the most. This risk has already surfaced once, with memory stocks falling into a bear market in July.
Price Analysis
MU broke out of a symmetrical triangle on September 3 and retested the breakout on September 14 near the 0.618 Fibonacci level. The stock has since reclaimed the 0.786 Fibonacci area near $1,053, which previously acted as resistance. The bounce came as the broader market pulled back from record highs.
Technical Indicators
Volume broke above a descending trendline on October 1, with the Relative Strength Index (RSI) sitting near 60 and rising, suggesting bulls retain momentum. The first target is the all-time high of $1,255, about 15% above the close.