There’s a shadow hanging over Micron Technology (NASDAQ:MU), despite the otherworldly gains from the past year. The company operates in the notoriously cyclical memory industry, leading some investors to fear that the current years of plenty will be followed by more fallow ones.
That’s likely one of the reasons the company’s share price hasn’t continued to skyrocket following (yet another) stellar quarterly report. Following an initial surge, MU has been sinking and has now lost some 11% since its late June earnings call.
The question for many is whether growth is sustainable, especially once production ramps up to meet the incessant demand. Into that debate steps one top investor known by the pseudonym Pythia Research, who believes that Nvidia provided further validation for the MU bulls.
“As Nvidia pointed out, extremely high prices of memory are putting pressure on the company’s margins,” said the 5-star investor, who is among the top 2% of stock pros covered by TipRanks.
Pythia calls this an “unusually good validation of the pricing power of memory suppliers.” Moreover, the investor points out that constraints in memory and other key components may be limiting the industry’s ability to grow at an even faster clip. That’s a dynamic that dramatically shifts the odds in MU’s favor.
