MU's structural thesis is strengthening; recent price weakness is a natural shakeout, not a market top.

Welcome everybody. It is Micron time. I'm here with my good friend J.R. Romero to talk Micron and all things AI.

It's Micron. It's maybe maybe the last big earnings report for like um the next couple weeks. So, Jr. I have um table on the screen with Micron quarterly EPS like through the the last two sort [clears throat] of cyclical peaks in Micron you could see they were making like 353 a share then 259 and now they're doing over 33 and

the big question out there is like [snorts] do you think this is as good as it gets for AI and Micron specifically?

I I'm seeing a lot of panicked people saying, you know, this uh this earnings report marks the peak in Micron. This is the the peak of the bubble. Micron had a gargantuan parameal industrialized earnings report that uh blew me away.

And I was I was expecting um I was expecting uh a good earnings report. I wasn't expecting this kind of report.

Now uh [clears throat] uh you know people are going to uh people are going to interpret the price action here in a variety of ways. I don't think it's completely material for the next day or two.

I I think we're going to uh I think I think we're going through a natural shakeout process here.

Are are you guys trading Micron? Are are you aggravated? Do you think it should be up?

And Micron and and just a reminder folks, Micron tends not to rally after earnings. It looks like um one, two, three, one, two, five of the only three of the last day quarters did it rally the day after earnings.

We we need to see this beautiful Micron chart you got for us.

Sure. So, this is the Micron chart. Okay. And um what I see here um is like I I look at this chart and uh I immediately just start salivating. This is looks This is ridiculous.

So, we have a uh in terms of uh you know results here um we're talking um uh non-GAAP EPS at 3342 versus 3182. A huge beat and then revenue. Grab on your plan aloon. Do you have a a good set of belts on and some adult diapers on the quarter 54 and a quarter versus 51.5 billion dollars?

Okay, I mean this is absolutely insane. the guidance 60 to 603 billion uh for quarter one non-GAAP EPS at um 37 to 39 uh GAP uh gross margin oh no sorry um and GAP EPS uh 368 to 386 uh [sighs and gasps] I mean they delivered numbers that uh are just going to they're just they scorched the the the eyebrows off my face.

We're talking about 87% gross margin. Uh you know, how do you pull off margins like this making micro chips in was it Idaho and some in Korea? It's absolutely insane.

Uh the structural thesis hasn't weakened, it has strengthened, right? Uh the naysayers were not just proved wrong, but freaking ridiculed.

Uh Micron has uh now 26 strategic customer agreements and that's 35% of their estimated revenue through 2030. Um 32 billion uh dollars of customer financial commitments. The HBM demand remains through the roof.

I mean these people are in like heart attack mode just trying to keep up um uh with the HBM memory. Um [clears throat] uh and uh their vast majority of their 2027 um HBM supply uh has already been uh contracted at significantly higher prices.

The future looks bright. Data center SSD revenue reached nearly 10 billion10 billion dollar dude.

you know people are saying h you know micron selling off uh here because we have you know we have we have somehow reached the top of the market is preposterous

It is a 38 uh what is it? 24 times the PH ratio of 24. What's the forward earnings for Micron 40? It's freaking preposterous. They had 4x growth. Yeah, I'm sorry. Yeah, the 4 P is 24. [laughter] Are you kidding me?

No, it's not. It's it's it's seven. Well, it's I think it's 24 now given the the latest. But uh but you know, I mean, you got a forward earnings of 24 with a gross margin of 86% and 4x growth year-over-year in terms of gross revenue is what I what I think I I understood to read.

and look look you you you'll see companies peak out when you have values of demand when the market is oversaturated when companies lose their fiscal moat or their competitive mode.

None of these things are happening. when they lose major suppliers, when they're unable to deliver, not these things are all getting better, they're all getting worse, right?

So, you know, I I I feel the naysayers are wrong here. It's you always look you always look smart when you're a naysayer, right? Because the crowd always tends to be right, but like you look at a chart like this and I'm telling you, wowza. Okay, absolutely wowza.

Now, we were trading the micron chart yesterday uh uh live in our room and we did a live tape read of it and I told my traders, "Okay, I I said, "Okay, guys, when we got through 1083 here and failed and in the in the after hours right there, I told my traders, uh yeah, right, uh right here.

I mean, we were watching the one and two minute chart, but I told him, "Okay, guys, party's over. I'm selling Micron." We bought Micron uh in the 1050s and the 1060s, rode it to 108 1086. When it fell 1080, we were out.

Why? Because uh there's a massive overhead supply zone in Micron here. Okay, if you look at an hourly chart of Micron, what you'll see is about 20 million to 25 million shares traded. um right at right around right around here 1080.

Okay. And that's just on on this first go around. It doesn't even even include uh the this the the first uh peing attempt. So there's a tremendous amount of overhead supply that needs to be absorbed and that's going to happen in the next few days.

Okay, sometimes you have to deal with the reality of supply and demand and sellers being there above. So in order for the market to you know uh actually advance and repric Micron right those sellers have to be serviced in terms of their their their offers being taken and Micron right around um right around 1080 has a a ton of sellers uh at least 20 30 million shares that need to be absorbed right and when something like that happens in terms and this is basic like woff analysis 101 right so imagine this is your overhead supply zone it's not a simple line.

Okay, so say this red line right here. I'm going to make it big [clears throat] and uh dotted for you. Okay, the dotted the big dotted line right here. Okay, it's somewhere between here and here.

You have just a massive amount of sellers. Okay, those sellers need to be absorbed. Okay, they want to break even. they went out, right? Or they want at least the possib the the probability of being green.

So then they can decide what to do. This entire process is going to take some time. Micron is not known for being a big earnings runner, which is 100% true.

And if you just look at the basic structure of this chart here, uh this is what Richard Woff would call a a reaccumulative structure with a final shake out. Okay. This was the markup right here.

Retest, automatic retest, secondary test. Okay. And then finally, uh uh post earnings. We had a big shakeout.

And what do we do right after the shakeout this morning? I had somebody asking me at around 10:25, somebody asked me, "What's your downside target on uh on Micron?" I said, "Kaput fenito, don't even think about shorting Micron here unless you want to get slapped in the face."

Okay, you're in a massive massive uh demand zone.

And this is this is why, you know, even analysts needed a little bit of remedial technical analysis. They were looking at this level here and they were thinking, okay, here's the breakdown and going like this.

When in reality, what's actually happening is a little bit more subtle. Okay, what's actually happening is we're about, you know, we we did this thing. We shook down here and now we're going to V up.

We're going to pull back. We're going to retest the highs and then we're going to go, baby. And then we're gonna go.

Let's do a basic measured moving micro since all those analysts, those poor analysts need some remedial technical analysis. They don't they don't know preferred stock from livestock.

So, there's two measured moves. There's a measured move from uh this is called point of control. This is the most the highest the second highest volume uh for Micron if you add all three consolidations.

That's 928 uh to 1099. Okay. So you draw yourself a line straight from here to here. Okay? And you got yourself 123436. And that's the small move. Here's the big the big fell. Okay.

And that gives you uh by late December, early January, let's just say quarter one next year, they move to 1434. 1434 sounds good.

You said Dram. Remember that? Two weeks ago, you said DRAM. Yeah. Dram's doing great.