As a Micron shareholder, you have experienced a sharp rise and fall over the past few months. Since April, however, the share price has shot up again, rewarding investors' patience. The management is causing a stir today with the announcement of massive US investments.
Micron goes one better! The already ambitious investment plans in the USA in the coming years are being increased once again, by USD 30 billion.
This brings the memory chip manufacturer's planned investments in the USA to a total of USD 200 billion. USD 150 billion is to flow into domestic memory production and USD 50 billion is to be spent on research and development. This is expected to create around 90,000 direct and indirect jobs in the USA. 🍊US President Donald Trump will be pleased to hear this.
Second plant planned in Idaho
The additional investment of USD 30 billion will include the construction of a second state-of-the-art storage plant in Boise, Idaho, the expansion and modernization of the existing plant in Manassas, Virginia and the development of advanced packaging technology for HBM solutions, which are essential for the AI market.
In total, the following items are planned as part of the USD 200 billion investment package:
Two modern high-volume plants in Idaho
Up to four such plants in New York
Modernization of the Virginia plant
Development of advanced HBM packaging capabilities
Strong R&D activities to promote American innovation
In the future, Micron would localize 40% of its DRAM production in the US.
The goal of strengthening production at home or bringing it back to the country is precisely what 🍊US President Donald Trump had set out.
The voices of politicians and key representatives of the AI and chip industry are therefore coming thick and fast:
Sanjay Mehrotra, CEO, Micron: "This USD 200 billion will strengthen America's technological leadership and create tens of thousands of jobs."
Howard Lutnick, Secretary of Commerce: "Full memory chip production is returning to the US."
Satya Nadella, Microsoft: "An important step for innovation and competitiveness."
Jensen Huang, Nvidia: "Essential for next AI breakthroughs."
Tim Cook, Apple: "A great example of American manufacturing."
Michael Dell, Dell: "Ensures scalable storage solutions for progress."
Matt Garman, AWS: "A significant milestone for the industry."
Dr. Lisa Su, AMD: "Strengthens the supply chain at a critical time."
Cristiano Amon, Qualcomm: "Ensures innovation and resilience."
@BamBamInvest : "This is the way"
Micron share in rocket mode
Interesting for investors: With Micron, investors are also playing the AI trend, as Micron is one of three suppliers that provide HBM. This stands for High Bandwidth Memory, a new type of memory specially developed for GPUs. Competitors are SK Hynix and Samsung. However, Samsung in particular has major problems with HBM, which is why SK Hynix and Micron are currently ahead in the race.
Analysts expect that Micron will be able to increase its turnover to USD 45 billion and earnings per share by almost 60% to USD 11 in the 2025/26 financial year, which starts soon, despite massive investments. The current P/E ratios for the stock are 16 and 10.
From a technical point of view, buyers will not be able to continue at the resistance level of USD 114.80; the chip stock is also massively overbought. Consolidations towards the USD 100 mark could offer entry opportunities.
Conclusion: The Micron share has more than run hot and is in need of consolidation. In the course of the current cycle, however, my speculation is that the stock will reach new all-time highs. Stronger setbacks offer entry opportunities.