Micron: Server RAM More Profitable Than HBM
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- Deep Value Investing maintains a Hold rating on Micron Technology, the same call made the day after the chipmaker's June print, citing balanced risk-reward despite sector tailwinds.
- Hyperscaler capex raises from last week, and likely this week too, are a strong tailwind for picks-and-shovels names, but the analyst says they don't justify moving off the fence on MU.
- Micron's record 84.9% margin is NOT coming from High Bandwidth Memory — a plain server memory stick has been more profitable per wafer than HBM this year, undercutting the dominant AI-memory thesis.
- Memory pricing, not unit volumes, is driving part of the hyperscalers' added budgets, according to the analyst, framing the capex uptick as much about cost inflation as demand growth.
- CMXT surged a 'ridiculous' 530% in its IPO debut, adding near-term noise to the memory and AI trade that the analyst says shouldn't be confused with fundamentals.
- The analyst rejects the oversupply narrative for this year, arguing supply-demand dynamics for memory don't support the bearish case being floated in some corners of the market.
Why it matters: Investors piling into MU as a pure HBM/AI beneficiary may be misreading the margin mix — that 84.9% gross margin is being carried by plain server DRAM pricing, not the AI accelerator memory that's the narrative driver. If commodity server pricing cools or the oversupply thesis the analyst dismisses proves correct, the headline margin that anchors the bull case would compress.
