Falling from 1255 to 698, is Micron finally bottomed out?
Fundamentals are explosively strong, revenue surged 256%, net profit 85 billion, gross margin 87%—but the stock price has been cut in half by 40% from its peak. Just now, long positions at 698 dollars are crowded over 80%, all waiting for a rebound to break even. Is this a golden pit or a trap for thousands?
First, look at the surface: good company, bad stock price.
Micron FY2026 revenue is $133.2 billion, up 256% year-over-year. Q4 single quarter revenue is $54.2 billion, up 379% year-over-year, EPS $33.42, gross margin 87%. Next quarter guidance is $61.5 billion, management says "this is the low point for the whole year."
Have you ever seen a "low point" guidance higher than the full-year revenue of peers? This is the madness of AI memory.
But what about the stock price? It crashed from the June ATH of $1255 down to $662, now at $698. Down 33% in a month, down 18% in a week.
Fundamentals are in the sky, stock price underground; this kind of divergence is the cruelest part of the market.
First thing: negative news is amplified, but you don’t believe it.
The Democrats won the midterm elections, what is the market afraid of? Afraid of stricter data center approvals, afraid of AI capital expenditure shrinking, afraid of debt financing costs crushing data center construction. Plus, media amplifying concerns about Chinese supply, chip stocks collectively collapsed.
But think calmly: $150 billion RPO (Remaining Performance Obligations) is there, most long-term customer agreements have price floors. Orders are signed, prices locked, what are you afraid of?
What you fear is sentiment. The market switched from "AI unlimited narrative" to "financing cost doubts," once this switch happens, even good companies’ stock prices get indiscriminately smashed.
When the market panics, it never distinguishes between good and bad companies; it only distinguishes "whether there is someone to take the other side."
Second thing: valuation is ridiculously cheap, but you dare not buy.
Based on realized earnings, MU’s P/E is only single digits to low double digits. Forward is even lower. Analyst consensus is Strong Buy, target price 1500+.
You pay 698 for a company with 87% gross margin, abundant net cash, and explosive free cash flow—is it expensive? No. But you fear it will fall further.
You don’t not know it’s cheap; you fear others will panic more than you after you buy.
Third thing: longs are too crowded, this is the real risk.
Open interest about 200 million USDT, accounts long ratio over 80%, top traders also predominantly long. But takers are short biased, funding rate slightly positive.
Everyone thinks "it has fallen so much it should rebound," all crowded on the long side. What does this structure fear most? One bearish candle wiping out all stop losses, then the real bottom appears.
Long crowding is not because they are right, it’s because no one wants to admit defeat.
Long-short showdown, you decide:
On one side:
FY2026 revenue +256%, net profit 85 billion, gross margin 87%
Q1 guidance $61.5 billion, management calls it the yearly low
$150 billion RPO + price floors, very high visibility
Valuation single-digit P/E, analyst target 1500+
December buyback restrictions expire, large-scale buyback expected
On the other side:
40% drop from ATH, 33% drop in one month
Daily/weekly bearish structure, price far below moving averages
Longs crowded over 80%, high squeeze risk
Macroeconomic inflation fluctuations, interest rates suppress growth stocks
Policy uncertainty after midterm elections
Key levels
Resistance above: 720-750 (recent highs/pivot) → 800+
Support below: 650-670 (recent lows) → 620-600
Trading strategy
Short-term players: don’t chase at 698. Wait for a pullback to 670-680 to lightly test longs, stop loss below 650, target 710-730. Add more if volume supports a stable break above 720, target 750. Break below 650 looks at 620-600 directly.
Swing players: wait for daily stabilization signals—hold above moving averages, RSI rebound, volume confirmation. Target 800-900. If macro deteriorates and retests near 600, that’s a better mid-to-long-term entry zone. December buyback launch is a catalyst, pre-position but don’t go full.
Long-term believers: dollar-cost average between 600-650. Fundamental golden pit, valuation ridiculously cheap. 2027 target per analyst consensus 1500+, but cyclical stocks require patience. Remember: good company ≠ good stock, good price = good opportunity.
MU now looks like Micron at the end of 2022—
99% thought "chip cycle peaked," but it went from 50 to 150. $BTC$MU$NVDA
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