u/Intelligent-Creme224 ·
Reddit — r/stocks
· July 17, 2026 at 16:17
· ⬆ 52 pts
· 💬 70 comments
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AI Summary
Summary
The post argues that Micron (MU) is a strong buy after a 30% drop from its peak, citing structural AI memory demand, take-or-pay contracts, high barriers to entry, and an oligopoly that protects margins.
The author believes the current selloff is a buying opportunity within the infrastructure phase of the AI revolution, predicting MU will "reach well over 2000" (presumably price) over the long term.
Quality assessment: Speculation with industry-specific reasoning (Capex, defect rates, HBM efficiency), but lacks concrete financial data or valuation metrics – more of a thematic thesis than rigorous DD.
Score52
Comments70
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MU was down over 30 percent since its peak this morning and people are freaking out and wondering if it’s over here’s my analysis on why it is still a buy
•CAPEX is not going anywhere
In a massive tech revolution there are TWO distinct phases the infrastructure and the application, right now companies like Meta, Google, Microsoft Etc, are actively building the foundation for their mega data center that won’t open for a couple years. This mean we are currently in the middle of the infrastructure phase Billion dollar companies cannot justify ceasing spending at this early stage they will just fall behind and will lose the ai race.
•why is this cycle different?
Two main reasons in my opinion, 1 is that micron has given big companies these contracts legally binding **"take-or-pay"** clauses . Even if Meta or Google wanted to slow down next quarter, they are legally obligated to keep paying Micron for the chips.
2. The defect rate for these memory is high, during production over 40% are thrown out since high bandwidth memory is super complex even if ten new factories which takes years are built it won’t reach the demand
•memory is too expensive to make
No random startup can ever enter this market. The heavy Capex requirement ensures that these 3 companies (Samsung, MU, sk) remain the only players in the game forever
•Why can’t big companies go find another memory manufacturer?
Easy micron has high bandwidth memory which is 30-40 percent more efficient than others in this highly industrial ai world this saves companies billions
•But what if they do go to another memory manufacturer?
Simple there is currently a oligopoly between the big 3, MU, Sk Hynix, Samsung, if one company decides to stop with micron they go to the other 2 and the market doesn’t react with “Look micron has lost a customer it’s going down” it usually reacts “look memory demand is at all time highs” which is why they all go up and down in sync
In conclusion I think we are still in the beginning, I see micron reaching well over 2000 we will see a crash maybe in the future talking about years but structurally I think this is not a cycle but a change into a permanent structural shift let me know what you guys think I’ll like to hear other perspectives