Micron stock (MU): the cheapest stock ever?

0:00 Intro: can riding the hype beat the market?

Hi, I'm Gus. With stocks, I've always been the careful type. Slow. And steady. But I've always kept an eye on the hysteria. On social media, the same stocks keep popping up. Year after year after year. So I checked them out. Record profits. Shareholders doing great. But how do they get there? What are people actually betting on?

The visionaries! Elon Musk wants AI data centers... in space. Launched from a giant cannon. On the Moon. Sam Altman has talked about a Dyson sphere around the sun. Full of data centers. Demis Hassabis thinks the end of disease is within reach. Maybe in ten years. None of it exists yet. And people are buying in. Who am I to judge? I just can't wrap my head around it.

But it's tempting. And I want in too! But how do you even pick one? My idea is simple. Stocks don't only move on numbers. They move on hype. So every episode, I find the stock everyone's hyping, check what's behind it, and buy in. Then we track it. Does riding the hype... beat the market?

Here's how I find them. Every week my scripts go through social media and pull everything people are saying about stocks. Then I line it all up. Which stocks get the most talk, and which ones are suddenly blowing up. But talk isn't everything. I also check how much of the price is hype. Most talk. Most hype in the price. That's our target. And this week... It's Micron!

1:33 What is hype?

So what is hype? Simple. This is what Micron owns. Everything it has, minus its debts. About 138 billion. And this is what the stock market says it's worth. 1.2 trillion. The rest is hype. About a trillion dollars. And what pumps it up? Talk.

1:54 What social media says about Micron

Okay. Let's see what social media thinks about Micron. This is my favorite part of tracking social media. I collected a ton of these while making this episode. Read some of them. Not all. Took me hours to animate. But this belongs here. This is the landscape. It's unhinged. And these are real posts. I love you guys. 'We are due!' We sure do. 'Extremely cheap…' ...Mm. Sure.

'You're welcome for the hopium.' In a moment, brother. 'Should be up to 1500.' ...'2500.' ...'6000.' 'The bears have determined that Sanjay farted during the earnings announcement.' ...Uuuh? Haha.

Guys who can't handle one red day.

Why all the salt? Guys, chill. It's up 270 percent this year. 'OMG grandpaps, you were a bear? Is that why mamaw works three jobs?' ...What? Haha.

Not this guy again.

3:12 What does Micron even do?

Okay. Micron. What do they even do?

Micron makes memory chips. Every phone, PC and server needs them. The new kind is called HBM: memory chips stacked on top of each other, right next to the AI chip. HBM takes about three times as many wafers to make as normal memory.

So every wafer that goes to AI is memory that doesn't go into your PC or your phone. Only three companies make HBM: SK Hynix, Samsung and Micron.

3:50 What the pros are saying

So where does all this hype come from? A lot of it trickles down from the finfluencers. Okay. What are the pros saying?

'I have never seen a company deliver this spectacular level of profit.' Wow.

'Micron can probably buy back all its stock over the next five years at this price.' Nice.

'Micron's stock could be valued at 6.2 trillion.' ...Uhm. Okay.

And this week, same guy: 'A screaming buy.' 'A no-brainer stock to buy now.' ...Okay.

Number two out of twelve thousand analysts. Target: 1,300.

'Memory's cyclicality is no more. So I keep loading up on Micron.'

'That is the death of boom-bust in one sentence.' Wow.

Even the CEO is hyped. Before the AI boom, Micron mostly sold memory for PCs, phones and servers. Now, in his latest earnings release: 'AI is becoming Super Intelligence.' A guy signed a decree the day before. And now this guy has to go out and announce it. Because apparently 'artificial' sounded fake. And it's not.

5:07 The FOMO montage

This is just ridiculous. The same hopium-huffing writers... Haha. Also spammed FOMO articles, so you'd jump on the bandwagon before it's too late. Way too many for one screen. So here's a montage.

That's three months. Mostly the same handful of guys.

...Okay. Maybe I should just buy. Everything they say about this company sounds amazing. But it can't all be true. Right? We'll analyze this in my lab.

5:47 Into the lab: what the reports say

So I downloaded their last three annual reports and read them back to back, to check what the finfluencers are claiming. So you don't have to. Let me sanity check myself before I decide. I'm giving up my sanity the moment I buy anyway.

Everything they said goes on the board. On one side, what they all agree on. On the other, what each of them is betting on. Let's check it. So. What did the reports actually say? And business is booming. Last quarter they did 54 billion in revenue. Same quarter three years ago? Four billion. Back then they lost money on every chip they sold. Now the margin is 87 percent.

85 billion in profit last year. Ten times the year before.

6:32 Is the memory cycle dead?

Okay. Honestly, that's good.

First one. This writer says memory isn't a cycle anymore. He calls it a utility. Something steady, like your power company. His reason is the new contracts. Big customers now sign deals for several years, with a minimum price. If prices fall, Micron still gets at least that. And that part is true. Those contracts are new. Last cycle the deals weren't binding. Now customers even paid billions up front.

But the article never says how much of the business that is. Micron's own number: a bit over a third. The rest still follows the market. If prices drop, most of it drops with them. Micron's biggest competitor wrote it in their own filing. In the past, new factories came online just as demand got weaker. Too much memory, lower prices.

So no, I don't think the cycle is dead. I think it shows up when the new factories do.

Memory goes in cycles. Not enough of it, prices go up. Too much, they crash.

And every cycle had a story. In 2017 it was an 'ultra-super-cycle,' driven by smartphones and artificial intelligence. AI was in the story back then too. Back in 2018 the CEO was talking about 'secular growth.' 'Enduring value in 2019 and the years ahead.'

Look at the stock. It peaked in May 2018. Profits kept going up for three more months. The day they reported the record, the stock was already down 26 percent. Then profit fell 91 percent.

2022, same thing. The stock peaked in January. Sales hit a record in June. By then the stock was down 43 percent. The year after, a loss.

And this year? The stock peaked in June and fell 39 percent in five weeks. Profits are still going up.

So the stock doesn't wait for the bad news. It moves months before the profit does.

8:31 The "no-brainer": when does the shortage end?

Next. The no-brainer. Same article, a bit further down: don't worry about a downturn anytime soon. He's quoting Micron. And Micron does say next year and 2028 will be tighter than this year. Everyone agrees on that. But the same report says what Micron is spending the money on. New factory space. Ready in late 2028.

And they're not alone. SK Hynix opens new factories in December 2028 and June 2029. Samsung reportedly in late 2028. All at about the same time. So when does the shortage end? I checked the market research. And here they're right: the shortage is real, and next year it gets worse.

The analysts who track the market say the new supply really starts to show in 2028. One even expects a small surplus that year. The chipmakers themselves say 2028, 2030, or no idea yet.

So credit where it's due. The shortage is real. But does it end in 2028 or 2030? Nobody knows. And not one of these articles even mentions it. So 'don't worry about a downturn'? Nobody can promise that.

9:40 Checking the $6.2 trillion math

And remember the 6.2 trillion? Let's check his math. Wall Street's average guess for next year: 150 dollars a share in profit. He took the highest one. 221. Then the top of his own range. 25 times profit. Best case, times best case. Run it through the hype equation. 6.2 trillion. Micron owns 138 billion. That's 98 percent hype. Even for hype, that's a lot.

And what's Micron doing with all that cash?

10:13 Buybacks, the CEO and the big funds

Remember this one? Buy back all its stock in five years. Micron promised a 10 billion dollar buyback in 2018. Eight years later it still isn't finished. The most they ever bought back in one year was 2.7 billion.

And this year? Zero since February. Their chip subsidy deal holds them back until December.

The CEO isn't held back. He sells 40,000 shares every four weeks. About 161 million since May. And he's not the only one. In one year the stock went up nine times. The big fund managers sold almost half their shares. Index funds kept buying. They don't get a choice.

Capital Group had 70 million shares a year ago. In June: 29 million.

Is that a problem? Maybe not yet. But if they keep cutting, it's worth keeping an eye on.

11:08 The verdict and my plan

So that's the board. Everything they agree on checks out. The profit, the shortage, the AI demand, the contracts. It goes wrong in the next step. They take the good news and stretch it. No more cycles. Six trillion. Buy back every share. They tell you enough to buy. Not enough to worry.

So I scrolled to the bottom. The site says it owns Micron and recommends it. In its own words. And right under 'no-brainer,' there's an ad for their paid list of the ten best stocks. Micron isn't on it.

And remember the top analyst with the 1,300 target? He's not alone. Nine out of ten analysts say buy Micron. Zero say sell. For the average stock it's six out of ten. So a lot of the talk comes from people who own it. That's fine. But when you reach that many people, show the risks too. Not just the best case.

That's all of it. What they agree on checks out. What they bet on is stretched. Now I know what I'm buying. So what's my plan? Next year the shortage gets worse, not better. Micron, Samsung and the market analysts all say that. That's the hopium I'll take. But the new factories come in late 2028. And both times before, the stock fell months before the profits did.

So I'm not waiting for 2028. If I buy, the plan is to be out sometime in 2027. When exactly? I don't know.

So why would I still buy it? The hype. That's the whole reason this series exists.

12:37 The Hype Fund: day one

So that's where we start. The Hype Fund. Day one. We'll check in every episode and see if the hype is beating the market. Bought at $1,084.92.

Drop your hype in the comments. Apes together strong.

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