Sanjay Mehrotra just figured out that selling more product at higher prices is better than selling less product at lower prices. Revolutionary stuff. The man runs a memory company that's been ping-ponging between feast and famine since before most retail traders were born, and now he's claiming AI broke the cycle.
Micron makes DRAM and NAND chips. For decades, the business model was simple: build too much capacity, watch prices collapse, fire everyone, build too little capacity, watch prices spike, hire everyone back, repeat until dead. This was not a mystery. This was the entire f*cking industry.
Now Mehrotra says AI changed everything. Data centers need memory. Lots of memory. So demand stays high and the boom-bust cycle disappears forever. Except commodity cycles don't disappear because one CEO says so. They disappear when supply and demand achieve perfect equilibrium, which in the history of semiconductors has happened exactly never.
The current boom exists because every tech company on Earth is panic-buying GPUs and cramming them full of expensive RAM to train models that autocomplete emails. When that spending slows—and it will slow, because all spending slows—Micron will be right back to eating sh*t in 2027.
But sure, this time is different. AI is magic. The memory industry solved cyclicality. And retail traders who bought MU at $100 will definitely not be holding bags when Samsung floods the market with cheap chips next year.
Mehrotra's job is to pump the stock while margins are fat. He's doing that job. Your job as a trader is to not believe him.
Photo by Brecht Corbeel on Unsplash
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