Micron's strong results did not lift the stock; skepticism persists on growth sustainability due to sky-high expectations and supply issues, though the speaker does not believe the good times are over.

This means you want to delve deeper into Micron's stock. These stocks are under pressure stemming from some of the weakness we saw last week following their quarterly results, although they came in better than expected.

So, let's talk about microns. Those shares are slightly low. Are the good times over ? I don't think so. Yes , I don't necessarily think the good times are over, but it's surprising given that last week's revenue results were $5.4 billion.

It has risen by 279% year-on-year , and the outlook has also been stronger than expected. However, the stock fell by 1% in pre- market trading and failed to recover when the markets opened.

Therefore, I think Wall Street remains skeptical about the sustainability of this growth. Moreover, the company's profits exceeded expectations by only 5%, compared to rates ranging between 20% and 40% that we have seen in previous positive surprises for some technology giants.

I think investors are currently mainly concerned about the supply crisis. The industry has stated that supplies of high-bandwidth memory (HBM) are expected to remain limited for 2027 and 2028.

And finally, I think it should be remembered that the memory sector is a highly cyclical sector. Therefore, many investors have realized this and know that there are fluctuations that accompany this sector.

Well, there is a valid point that can be made regarding the number of customers that have been secured for Micron for the coming year. They have 26 strategic customer agreements through 2030 , which represents about 35% of their projected output.

So that's for sure, but I think it also depends a lot on your assumption about the direction of AI trading , because a lot of this focuses on HBM memory rather than regular memory such as DRAM and others.

Therefore, I think a lot of expectations are already built in by optimists regarding their view of the development of artificial intelligence and the continued demand for HBM memory in the next few years .

Given the stock's reaction following the announcement of the results, which was strong regardless of the benchmark used to evaluate Micron. Does this show how high the expectations are for these companies operating in the memory sector?

Yes, I think so. I mean, you even witnessed that gap between expectations and reality . I think investors' expectations are now sky-high regarding the likelihood of results exceeding expected performance.

While investors now expect much of the same earnings results, and it's good to see that they still exceed expectations , the results now need to be much higher for the stock to actually rise based on them.

I believe that due to historical fluctuations in memory prices, the current shortage in supply could pose a potential problem. They have invested in capital expenditures to build more factories, but it will take some time to get them up and running.

Therefore, I believe we are currently facing a risky overall situation with regard to interest rates, which could put pressure on potential spending. We also need to consider whether the factories will come online quickly enough to meet supply needs.