Micron Earnings to Be ‘Gut Check Moment’ for Markets, Dan Ives Says
Speakers
Dan Ives
— Managing Director, Wedbush Securities
Summary
Dan Ives of Wedbush Securities views Micron's earnings as a gut check for the AI memory trade, with checks showing no demand cracks. He remains bullish on memory chips, names SK hynix as outperforming Samsung, sees Microsoft as oversold with a $550 target, and believes Meta will eventually prove its heavy CapEx spending. He also discusses margin compression timelines and public-private AI partnerships.
- Micron earnings seen as a key gut check for the AI memory trade; demand checks are solid (12-15:1 demand-supply ratio) with equilibrium 1.5-2 years away.
- SK hynix is overtaking Samsung in memory, giving it a competitive edge in the AI boom.
- Microsoft is considered the most oversold large-cap tech name and has a path to $550 driven by Azure growth and enterprise strength.
- Meta faces a prove-it moment due to heavy CapEx without results, but Ives expects the company to eventually succeed.
- Competition from Google, Amazon, and others may pressure semiconductor margins in 9-12 months, but the buildout remains early (third inning).
- Public-private AI partnerships could play a role, with Intel and quantum computing (IBM, Arvin) mentioned in the context of government initiatives.
Ideas
Micron earnings confirm strong AI memory demand
Micron's earnings are a crucial gut check moment for the AI memory trade. Checks in Taiwan and Korea show no cracks in demand. Memory chip demand outstrips supply by a 12-15 to 1 ratio, and equilibrium is not expected for another 1.5-2 years. Micron will confirm the continued strength.
SK hynix overtaking Samsung in memory chips
SK hynix is overtaking Samsung in the memory chip market, capturing a lead in the AI memory boom. This company-specific momentum gives it an edge over its largest rival.
Microsoft oversold, $550 target on enterprise strength
Microsoft is the most oversold large-cap tech name. Despite stumbles with Copilot, the company’s enterprise base, Azure growth, compute demand, and supply issues support a path to a $550 stock price. The negative sentiment is similar to what surrounded Google a year ago before it recovered.
Meta will succeed despite heavy CapEx spending
Meta is in a bear market because of heavy CapEx spending without visible results, but Ives believes the company will successfully change its model and prove the investment. The current sell-off presents an opportunity if they deliver.
