MU earnings were strong but stock faces near-term dip due to priced-in perfection; long-term margin sustainability is doubtful as competitors may enter.

Revenues were four times higher than last year. So, Micron has once again exceeded expectations spectacularly. Revenues reached $54.2 billion. They outperformed in profits.

Overall, this report was very strong. We must also remember, as I mentioned, that this is the memory sector. So, people put Micron and Nvidia in the same conversation. Nvidia is making more chips.

Micron makes chips, but it is more dedicated to the memory side of artificial intelligence, which is still very healthy and very strong, and as I mentioned, they have problems with demand.

Well, demand is very strong, but supply is very constrained. Therefore, they have pricing power, and they have been able to take full advantage of that and use it to their advantage, and the company is achieving overwhelming success.

So, all things considered, in the big picture, this report was really very strong. There is no doubt that the memory sector as a whole is a very strong field and continues to generate significant revenue.

$54.2 billion in revenue, better-than-expected earnings per share of $33, and we expect $61.5 billion in revenue in the next quarter. Why isn't that enough to push the stock upwards?

Listen, I mean, we've seen that Micron has mostly delivered what the optimists were hoping for, which is a kind of clear vision for the next year or two. This still represents the question here, in my opinion, regarding the length and sustainability of this cycle.

But when we look at Micron here, listen, the gross profit margin guidance was a little weak, but I think it's one of those cases where maybe the market wanted more. Perhaps something related to announcing a share buyback, or perhaps presenting what they could start doing by the end of this year.

We didn't get that, but we mostly did, when you consider some of the announced strategic customer agreements, the order book growth, and all that stuff, it was pretty great.

The truth is, it will take a few quarters before you gain more believers in this story regarding the sustainability of margins and prices. Yes, I mean I would be surprised if they could maintain it in the long term.

Ultimately, in the long run, competitors will enter this field because of these high margins. I believe it reached 87%, which are amazing margins that Micron has continued to achieve.

Ultimately, if you experience even a slight decline in demand or an increase in supply from other competitors or even from Micron itself, I don't think you'll get such high margins in the future.

But looking at this report, those high margins certainly help the company generate significant profits that are reflected in net income. I believe that perfectionism has become expected and factored into stock prices at this stage.

So, this is the tricky part, and this is why we're likely to see the stock dip a little today. You buy based on rumors and sell when you hear the news, because these companies are evaluated and priced with absolute perfection.

What motivates a company like Micron more is the big macro news and the huge announcements that are made to the sector as a whole, and not necessarily these earnings reports that the market and investors demand be perfect and flawless.

Even if they are, even if they have covered 99% of the way, they are looking for gaps in the defenses to sell as soon as the news is officially released.

And Angelo, you have a price target of $1500 here for Micron stock. Currently, the price is around $1046, so you are expecting an increase of more than 40%. What are the key things that need to happen for a stock to justify this type of valuation?

Yes, I think that commenting on "Meta" is kind of the path I would take in this regard. I think it's no longer just about exceeding expectations and raising profit estimates. I don't think so; rather, I see it as a time period more in line with showcasing the story of profiting from artificial intelligence.

It's about showing that their customers are able to demonstrate that, hey, we are able to reach the next level in terms of showcasing larger AI use cases. If that happens, the entire artificial intelligence system will move in line with this trend.

So, once again, it's really all about proving that consistency and being able to maintain at least some of those margins over the next six to eight quarters. I am absolutely convinced of that.

You won't be able to maintain gross profit margins in the mid to late 80s in the long run, but you might be able to maintain a profit margin close to 70% or so. If we can see this environment in the long term, I think that bodes well for long-term investors.

But at this point in time, I think it's more about seeing that whole system actually evolve and seeing free cash flow continue to show what it just did this quarter.