#MicronReportQ4Earnings $MU
Options Priced 8% to 10%, Micron Moved Under 1% After Hours: The Question Nobody Asked Was Capex
The pre-earnings debate centered on two things: HBM4 progress and the 2027 outlook. Both got answered, and the stock barely reacted. The options market had priced a move of 8% to 10%. After the report MU slipped 0.78% to 1,056.75 after hours, then rose about 3% the next session. A move that was a third of the lower bound of what was priced tells me the answers were already in the price. What the tape did react to was a third item.
On HBM4, management said the ramp is executing well and that HBM revenue grew faster than company revenue in the quarter. The vast majority of calendar 2027 HBM bit supply is already under agreement at significantly higher prices, and a custom HBM4E product is being developed with NVIDIA. What was not given matters just as much: no updated HBM market size and no firm share target, only a vague reference to being around its broader DRAM share. So the product story is strong, but investors still lack numbers to model it.
On 2027, Micron expects another record year with sequential revenue growth every quarter. More than 75% of planned fiscal 2027 shipments are already committed, allocation talks for 2028 have started, and supply is expected to stay tight through calendar 2028. First-quarter revenue is guided to $61.5B against roughly $56.6B expected, and management called Q1 the floor for gross margin this year.
The part nobody asked about is spending. Capex is $11.5B in the first quarter and about $25B for the first half, with the second half higher. An analyst framed fiscal 2027 as above $50B, which compares with roughly $27B in fiscal 2026, nearly double. Operating expenses are also rising by about $2.5B, against a $1B increase flagged earlier. That is the line that pushed the stock lower on the call, and it is the new bear argument: first Idaho wafers are not due until mid-2027, so the supply that follows this spending arrives after the cycle is already priced as tight. The size of the EPS beat also shrank from about 39% two quarters ago to about 7%.
On Friday's hourly chart MU is at 1,098.01, pressing 1,101.30 resistance and sitting about 2.7% above its 1,069 average cluster, with support at 1,042.16. One price target has already moved to 1,200 from 1,100.
My bias is bullish while MU holds above 1,069. The line that tells me the capex worry is winning is a daily close under 1,042.16. A clean break above 1,101.30 targets 1,125 and then 1,200. Until then I treat any move on the HBM story as already paid for and watch spending as the variable.
When a company guides far above consensus and the stock still goes nowhere, do you read that as a strong base being built or as proof the good news is fully priced?
DYOR, NFA
@Gate_Square
Options Priced 8% to 10%, Micron Moved Under 1% After Hours: The Question Nobody Asked Was Capex
The pre-earnings debate centered on two things: HBM4 progress and the 2027 outlook. Both got answered, and the stock barely reacted. The options market had priced a move of 8% to 10%. After the report MU slipped 0.78% to 1,056.75 after hours, then rose about 3% the next session. A move that was a third of the lower bound of what was priced tells me the answers were already in the price. What the tape did react to was a third item.
On HBM4, management said the ramp is executing well and that HBM revenue grew faster than company revenue in the quarter. The vast majority of calendar 2027 HBM bit supply is already under agreement at significantly higher prices, and a custom HBM4E product is being developed with NVIDIA. What was not given matters just as much: no updated HBM market size and no firm share target, only a vague reference to being around its broader DRAM share. So the product story is strong, but investors still lack numbers to model it.
On 2027, Micron expects another record year with sequential revenue growth every quarter. More than 75% of planned fiscal 2027 shipments are already committed, allocation talks for 2028 have started, and supply is expected to stay tight through calendar 2028. First-quarter revenue is guided to $61.5B against roughly $56.6B expected, and management called Q1 the floor for gross margin this year.
The part nobody asked about is spending. Capex is $11.5B in the first quarter and about $25B for the first half, with the second half higher. An analyst framed fiscal 2027 as above $50B, which compares with roughly $27B in fiscal 2026, nearly double. Operating expenses are also rising by about $2.5B, against a $1B increase flagged earlier. That is the line that pushed the stock lower on the call, and it is the new bear argument: first Idaho wafers are not due until mid-2027, so the supply that follows this spending arrives after the cycle is already priced as tight. The size of the EPS beat also shrank from about 39% two quarters ago to about 7%.
On Friday's hourly chart MU is at 1,098.01, pressing 1,101.30 resistance and sitting about 2.7% above its 1,069 average cluster, with support at 1,042.16. One price target has already moved to 1,200 from 1,100.
My bias is bullish while MU holds above 1,069. The line that tells me the capex worry is winning is a daily close under 1,042.16. A clean break above 1,101.30 targets 1,125 and then 1,200. Until then I treat any move on the HBM story as already paid for and watch spending as the variable.
When a company guides far above consensus and the stock still goes nowhere, do you read that as a strong base being built or as proof the good news is fully priced?
DYOR, NFA
@Gate_Square
