$MU

My Gate screen shows $MU. $1,087. A 10.91% increase in the day. The previous close was $980.
A year ago, this stock was $103.
A 957% increase. In one year.
Even writing that number feels strange. But the main point of this article isn't the price. It's the valuation. And what the valuation says.
The price-to-sell ratio is currently 21.16 times. At the peak of the dot-com bubble, this ratio was 10 times. It's more than double that level now. This single statistic bothers many people, and it should. But we need to stop here and ask: Is this comparison accurate? Is Micron in 2000 the same company as Micron in 2026?
I say no. And I want to explain why.
In 2000, Micron was a standard memory manufacturer. A business that largely operated on commodity logic, with its price entirely dependent on the supply and demand cycle, and its margins fluctuating dramatically. At that time, a 10x sales multiplier was overvalued because the underlying business model was based on commodity cyclicality.
In 2026, Micron is a different company. The transformation began with a single product: HBM, or High Bandwidth Memory.
AI training systems need to process enormous amounts of data very quickly. Standard memory cannot meet this speed. HBM is a special architecture that physically brings the memory and the processor closer together, increasing bandwidth tenfold. AI accelerators cannot function without this memory.
And there are only three companies in the world that can produce HBM. There is no alternative to these three. Micron is one of them.
The last quarter's guidance is $33.5 billion in revenue and an 81% gross margin. This margin figure is unprecedented in Micron's history. The company is under such high demand that its customers can only get 50% to 66% of what they request. 2026 production capacity is completely sold out. The first five-year strategic customer agreement has been signed. Revenue visibility has historically been close to zero. Now it is very high.
Some analysts are targeting $1,250 to $1,500. Others argue that the current price is well above its intrinsic value. Such a deep divergence among analysts speaks volumes in itself. No one can easily price this company using standard methodologies.
But I have to be honest here.
The 21x sales multiple is a real warning sign. Historically, companies priced at these levels either underwent a truly structural transformation or ultimately experienced a very sharp downturn. Both have happened in history.
The cyclical risk is real. The memory sector has always been cyclical. When prices peak, capacity expansion begins. After 12 to 18 months, supply exceeds demand, prices collapse, and margins evaporate. The 1990s, 2000s, 2010s. This cycle has occurred in every decade.
Will this time be different? HBM architecture is far more complex than standard memory, and its production is possible in a much more limited number of factories. This structural constraint may soften the cycle, but it cannot be expected to eliminate it entirely.
The company's free cash flow in 2026 will exceed the total of all previous years combined. This isn't a prediction; it's what management has stated. Global capital expenditures on AI infrastructure are breaking records every quarter. This demand will continue to exceed supply until 2028.
The chart perfectly illustrates this tension. On the weekly chart, the stock rose from $61 to $1,097. MA30 is $490. MA60 is $316. SuperTrend is $734. The price is well above all these averages. MACD values show strong upward momentum. The positive histogram is growing.
The June 24 earnings announcement will be critical for this stock. If the guidance exceeds expectations, the momentum may continue. If it meets expectations, there may be a sell signal reaction. If it falls short of expectations, the correction will be sharp. All three scenarios are on the table.
I hold this stock with a small position in the Gate Trading section. Holding a large position size at a 21x sell multiplier means going beyond my risk management. I'm making enough profit when I'm right. If I'm wrong, it's a manageable loss.
If the AI memory loop is truly structural and Micron's margins remain at these levels, a 21x sales multiple will seem ridiculously cheap in 5 years. But if supply balancing is brought forward to before 2028, the current price could be the starting point for a very sharp correction. The only way to manage this uncertainty is to adjust the position size accordingly.

This content is for informational purposes only and does not constitute financial advice.

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