Micron is a clear memory winner: revenue up 380% year-on-year to $54 billion, guided to $61.5 billion next quarter, forward P/E under 7. Pessimists' cycle worry is answered by management seeing supply-demand imbalance through 2027-2028, though capex near $50 billion and a 75-basis-point margin dip are risks.

Micron announced record profits. It was actually one of the most exciting earnings results we've seen from a company like this in years. Revenues exceeded $54 billion. This represents an increase of approximately 380% year-on-year.

With a gross profit margin of 87%, the bottom line is that the memory chip industry has transformed from a boring, cyclical business into one of the most lucrative areas of the artificial intelligence trade , and this has happened in approximately 18 months.

I mean, the first stock I want to mention here is Micron Technology itself. Isn't that so? This is the company you mentioned, isn't it? Growth of 380% year-on-year. On a quarterly basis, revenues increased by 31%.

This is one of those stocks that the market is completely divided over. Isn't that so?

The pessimistic viewpoint says: Look, the numbers look fantastic. I won't argue that the numbers don't look great , but when does this story end in this typical cyclical market?

Will it end anytime soon ? And I sense that the optimists are saying, "Hey, the numbers are strong, and the comments the management is giving us indicate that this cycle will last much longer than any other."

Therefore, now is probably not the time to worry about the cyclical nature of this work.

I'll share some numbers and some reasons why we're excited about Micron , but it's always good to be aware that there's a sort of pessimistic cloud hanging over Micron.

But as Rachel mentioned, the revenue reached $54 billion. This represents a 31% increase on a quarterly basis. As we said, an increase of 380% on an annual basis . Full-year revenues are 133 billion, an increase of 256% compared to last year.

Just in case investors weren't aware, they've just announced their fourth-quarter fiscal year results. So, they have just finished their fiscal year. They are about a quarter ahead of the calendar year .

Therefore, they provided that type of guidance for the entire year. As for the next quarter, the first quarter, they still expect good growth on a quarterly and annual basis. Revenue is expected to rise to $61.5 billion.

That's an additional increase of about $6-7 billion over what it is now. Adjusted earnings per share of $38.15. So management is telling you directly , look, in the next quarter we won't see that weakness.

On the contrary, we will continue to see huge demand. They have given us feedback throughout the next quarter and for next year that they expect consecutive revenue growth throughout next year.

They believe that the imbalance between supply and demand will not be resolved in 2027 or 2028. Clearly, this is what management is telling us, and they are very optimistic about their business.

So, understand also that they have some kind of incentive or motivation to be more optimistic about their work. But what they are telling us is that the demand already exists. Now, there are some things to consider, especially if you are pessimistic and worried about some of the underlying risks, which is that capital expenditures are very strong.

They stated that capital expenditures for just the first half of next year would be around $25 billion, and the second half of that year would be even larger. So , from the start you are already getting at least $50 billion in capital expenditures for fiscal year 2027, and that represents a peak for them.

They had never seen this type of capital expenditure before . I think they have spent around 30 billion recently. So, this is a significant increase in capital expenditures, something investors should take into account, because what will happen when the supply and demand story ends? They will have many supply chain lines .

The other thing they mentioned is that gross profit margins are expected to decline sequentially in the next quarter by about 75 basis points. So, a drop of about 0.75 is not a big deal, but I think it starts to raise questions.

Why are gross profit margins decreasing, isn't that so ? This is just the beginning of that story. However, management stated that overall profit margins after the first quarter should increase thereafter due to the prices they are receiving .

So, for me, Rachel, I mean Micron is clearly one of those winning companies in the memory field. If we're only looking at companies affected in the memory industry, I mean Micron is trading at a forward P/E ratio of less than seven, and you can certainly see the bullish sentiment, but I also understand why pessimists are staying away from this company.

You see companies like TSMC, Intel, SK Hynix, and Micron, all increasing their capital expenditures, Yes, and I think the important thing about these three companies today is Micron, Western Digital, and Lam Research.

As you know, they all benefit from the same trend, which is the expansion in the field of artificial intelligence.

We believe these are examples of three compelling growth stories , but we would like to hear your opinions in the comments.