Micron's Record NAND Surge and Cramer's $2,000 Target Face Cyclical Skepticism

Key points

• Micron's fiscal Q4 results showed revenue growth of 379% and gross margins reaching 87%, with non-GAAP EPS at $33.42.
• NAND revenue hit a record $14.1 billion, up 526% year-over-year, with data center SSDs accounting for over two-thirds of the segment.
• Jim Cramer and Melius Research analyst Ben Reitzes set a $2,200 price target, citing long-term supply agreements and a shift to secular growth.
• Micron has allocated $200 billion in capital expenditure to expand capacity, with HBM4 memory sold out for 2026 and a $150 billion backlog.
• Analysts project normalized EPS to fall from $206 in fiscal 2028 to $139 in fiscal 2030, reflecting fears of a cyclical peak.

Background

Micron shares recently reclaimed the $1,000 mark, though they experienced post-earnings volatility despite strong results. CEO Sanjay Mehrotra has previously asserted that AI demand has ended the traditional memory boom-bust cycle, though investors remain cautious about margin pressures. This follows a period where Nvidia approved a record $235 billion buyback program, highlighting the broader AI infrastructure spending trend.

How outlets are covering it

Bullish voices, including Jim Cramer and Melius Research, emphasize Micron's transition to a secular growth company, citing a 526% NAND revenue jump and a forward P/E of 7 as undervalued compared to compute peers. Cramer specifically noted that Toshiba's announcement has minimal impact on Micron and urged the CEO to announce a larger buyback. Conversely, TIKR and Seeking Alpha highlight cyclical risks, noting that most NAND gains were driven by price rather than volume, and that consensus estimates expect a third of earnings to fade by fiscal 2030. TIKR points to a Singapore NAND fab starting output in 2028 as a potential supply glut trigger, while SK hynix's lower valuation suggests the market may be pricing in a memory price normalization.

Why it matters

Micron's performance serves as a bellwether for the sustainability of AI-driven memory demand. If the company can maintain high margins and execute its $200 billion capital plan without triggering an overcapacity crisis, it validates the secular growth narrative. Conversely, a reversal in NAND pricing or a slowdown in data center buildouts could expose the stock to significant downside, given its current valuation and heavy capital commitments.

What to watch

Micron's next quarterly report, covering the period ending in late November, will be critical for assessing whether NAND bit growth outpaces revenue growth, which would indicate falling prices. Investors will also watch for any announcements regarding a larger share buyback program, as suggested by Cramer, and monitor the impact of the Taoyuan plant union strike authorization on production timelines.