Morning Wrap: Micron (MU) Takeaways, Tech Research/News

Good morning. Futures -65bps overnight after yesterday’s esclation in the Iran war as South Pars gas field strike caused retaliatory strikes against oil and gas infra overnight, although Trump attempted to defuse things overnight by blaming it on Israel and saying no additional attacks on Iranian Energy assets were planned. Oil +1%. BTC -2%. Yields popping this morning with 2 year +11bps and 10 year +4bps.

Asia was largely red overnight: TPX -2.91%, NKY -3.38%, Hang Seng -2.02%, HSCEI -1.58%, SHCOMP -1.39%, Shenzhen -2.27%, Taiwan TAIEX -1.92%, Korea KOSPI -2.73. Memory names down following MU: Samsung/SK Hynix -5%

We’ll hit MU and JBL First, then the usual…

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MU -6%: Massive beat and even bigger guide above bullish bogeys, but peak GM debate alive overnight

No one is arguing numbers were much better than expected after last night. Debate overnight centered on whether 80%+ GM is close to peak (is this “as good as it gets?” / “too good it’s bad”), spot price (vs contract) likely stabilizing and whether FY26/FY27 capex raises are the first step toward overbuild. MU will likely be run-rating $100 in May (buyside at $120 for F27) so even if you slap a peak multiple on the stock, the r/r still looks solid here (although bears will say you should only give 4x to a F28 # in which margins have potentially normalized sub 80%). Nothing concerning to us on the memory trade (stock is just back to where it was Monday) although we do think 80%+ GM is unsustainable in the LT and it’s true spot prices have been normalizing recently for DRAM vs. contract (here is DDR5 spot). I actually hadn’t pulled this chart up in a bit so was surprised to see it: