$MU · Dividend Data · 2026-11-05

memory makers like SanDisk and Micron,

Companies like SK Hynix, Micron, and Samsung design and manufacture memory.

And in this context, the fourth stock on our list today is Micron, whose ticker symbol is MU. It is one of the leading companies that manufacture memory. We know that there is currently a severe memory crisis.

Micron, a company that has historically gone through major ups and downs as a commodity business, is now seizing this opportunity.

The entire memory sector is made up of Micron, SK Hynix, and Samsung. They are now charging sky-high prices because they know that one of their biggest customers, Nvidia, is willing to pay higher prices because they are making a lot of money.

In the latest quarter, Micron's gross margin was 86.8%, operating margin was 80.7%, and net margin was 69.5%. Micron's profit margin is now higher than Nvidia's. And they are making incredible profits, which I will detail.

You might say, "Hey Dad, isn't this stock overvalued? It's up 825% in the last 5 years." Okay, if we see selling pressure today, the stock is down 15% today. It has decreased by 27.65% in the last 5 days.

It has decreased by 36.6% in the last month. But surprisingly, it is up 113% year-to-date.

Believe it or not, this lags far behind real income growth. Micron's revenue has grown 599% this year. And the reason for this is that they are charging too much. So, there has been a big jump in their profits.

Look at this chart historically. It increases, decreases, and fluctuates repeatedly. In the latest quarter, they are earning eight times more than their previous peak in 2018. This is just a one-quarter estimate.

And it won't decrease in the next year or two. There is still a severe memory crisis.

Micron generated $32.86 billion in free cash flow in the latest quarter. This is 45,000% more than last year. Their business model is not as capital-intensive as Nvidia, AMD, or Broadcom, because they make these products themselves, which I mentioned earlier.

And that's why they've started increasing their capital expenditure, or capex, because they've been told, "You need to increase production." And if you listen to almost every CEO of these companies, they say they're not producing anything compared to what's needed.

Because everyone else wants memory to become an easily accessible or common product again. They want it to be cheap. They don't want memory loss. But Micron, SK Hynix and the rest are saying, "Oh my God, we're making more money now than we ever have."

And it will continue to grow until next year, based on last quarter.

So, what does this mean? In fiscal year 2027, the company's current earnings per share are expected to be $175.61. After today's share price decline, this indicates a P/E ratio of 3.8.

This is not usually seen in the stock market. It's so cheap that you'll wonder what's really going on.

Basically, if you want to know why it's currently priced like this, it's because people think the company is making more money than it needs to. And maybe after 2, 3 or 4 years, earnings per share will drop significantly again.

They may have to cut margins again, and this is only a short period of extra income. And in the long term, perhaps 10 to 20 years from now, this will definitely be true at some point.

Having a memory deficit for the rest of the economy is not at all ideal. But those who are positive about companies like Micron say that there has been a structural change in the market.

Because now AI data centers and companies like Nvidia will need this high demand for memory. And that might be true, and it certainly seems to be true for next year or the year after that.

A closer look at what is happening at Micron reveals that it is not an AI innovator or leader. They are still making exactly what they were making a few years ago. There has been some slight improvement.

They are not leading this revolution in any way. They are taking advantage of the situation and increasing the prices of the products they manufacture. Especially in the case of DRAM.

And they have increased the prices of all kinds of products.

Data centers are becoming a big part of their business, and so are cloud services in general. However, these are all old business areas, for which they are now charging sky-high prices.

Mobile. This is why your iPhone costs more. This is why when you buy a laptop, it feels more expensive. All this is happening due to the rising price of RAM. And the reason for this is that this data center business, which was very small a few years ago, has now become very big.

So, they need it and they are making the most money using it. That's why, they are willing to pay more than others.

So, even though Micron stock has risen 825% in the last 5 years, it may seem like a great investment right now. This 15.29% drop now looks very attractive.

Again, let me explain the matter with numbers. The entire company, that is, its market value at today's share price, is $762 billion. They generated $32.86 billion in free cash flow in the latest quarter.

If they maintain this pace for the entire year and don't grow, that would be $131 billion in free cash flow. This means the company is trading at 5.8 times its free cash flow.

This may seem very cheap, but the risk is that if the memory crisis is somehow resolved and they cannot charge the same prices as they do now, the income from this business will decrease significantly.

As an AI follower, I believe that major algorithmic improvements will be needed so that inference training AI agents require much less memory. The best companies in the world, all the AI labs and big tech companies that are building superintelligence, are focused on solving this memory problem because it has become too expensive for them.

So, there is potential for innovation to occur throughout the supply chain. Maybe Nvidia has an innovation where the next generation design will use less memory. Or Anthropic and OpenAI, they can use their superintelligence to solve complex problems like Navier-Stokes or math, and say, solve the memory problem.

All of this can happen. These are likely to happen. Surprisingly, demand may be so high that Micron may survive even after all this happens. Who knows? This is a risk when investing in Micron.