I’ve been thinking about Micron heading into earnings. AI has created enormous demand for memory, almost unlike anything we've ever seen before. So it’s easy to look at the business and assume a strong report would send the stock higher just based purely on the results, in which they've double beat 8 quarters in a row.
But beating alone will not tell us much if investors already expect one and have priced it in. I’m going to be looking at what management says about pricing, future demand and how long the current growth can last much closer than this quarter's actual results. As the earnings reaction will ultimately come down to the guidance imo.
That’s also what makes the valuation debate interesting. On the surface $MU looks cheap on forward earnings, but investors still worry that today’s margins and growth rates won’t hold indefinitely. For those following Micron, if they beat but the stock drops, would you see that as an opportunity or a warning?