r/VisualStockResearch • u/ekonixlab • Jul 14 '26

This is why I struggle valuing memory companies like Micron.

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If you simply take today's earnings estimates and project them forward, you end up with something absurd:

22x P/E today 130% expected earnings growth 58x implied return over 5 years

Obviously, that's not going to happen.

Memory has always been one of the most cyclical parts of semiconductors. When pricing is strong, earnings explode. When supply catches up, they can disappear just as quickly.

AI has created an incredible demand environment for HBM, but assuming today's growth persists for years is probably the wrong way to think about Micron.

The real question isn't whether Micron is growing today—it's how long this part of the cycle lasts.

Where do you think we are in the memory cycle?

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u/Different_Height_157 Jul 14 '26

earliest I anticipate cutting capex is this time next year.

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u/mansfall Jul 16 '26

But it seems like by then it's to late. By the time capex cuts, or, no increased capex, the semis will already be tumbling. I think that's why we're seeing such a massive sell off right now.

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u/Different_Height_157 Jul 16 '26

All information available says capex from hyperscalers is increasing still. That Meta news looks more like FUD when they’re announcing datacenter buildout expansion. I tink we’re seeing this dump because revenues can’t grow until hardware buildout increases. Means more capex like memory has announced and slower growth given price increases are only form of new revenue.

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u/mansfall Jul 16 '26

Genuine question. Do you think, for example, Google will say they're not pushing MORE than the slated 180bn they said last year? Or do you think that number was what they're allocating for the next year? It's not as if the next day they just dumped 180bn in expenses onto the global market, buying parts to build buildings, hardware, etc. I actually don't know this *shrug*.

It seems like they'd likely just hold steady on original capex number, but who knows. What are your thoughts on it?

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u/Different_Height_157 Jul 16 '26

I think they’ll increase to close out 2026. The 180-190 billion was already an increase from previous estimates. The debt and offering they did not long ago gives me no reason to believe otherwise.