Micron: Cyclical Growth Selling At The Price Of Structural Growth

David Desjardins2.39K FollowersFollow5ShareSavePlay(17min)Comments(2)SummaryMicron is the third-largest memory and storage chip manufacturer in the world, behind Samsung Electronics and SK Hynix, which operate out of South Korea.The DRAM market is known for its deeply cyclical behaviors, with prices having a long history of going well below production costs during downcycles before overshooting during upcycles.Micron recently announced long-term capital plans of $200 billion, including a $100 billion megafab in the state of New York, as well as two other fabs in Idaho.Samsung Electronics and SK Hynix are also ramping up capacity to meet market demand, with significant production forecasted to come online in early to mid-2027.Micron is currently trading at a free cash flow yield of ~3.3% using the Q1-FY26 results on an annualized basis. This is cyclical growth selling at the price of structural growth. For Micron's investors, making the difference between the two has probably never been so important. Sundry Photography/iStock Editorial via Getty Images A Tale Of Two Markets After researching many enterprise software companies like Adobe (ADBE), Intuit (INTU), Salesforce (CRM), and ServiceNow (NOW) earlier in the month, I nowThis article was written byDavid Desjardins2.39K FollowersFollowFor almost a decade, I held research analyst positions in various investment firms, mostly in Toronto. I started in sell-side research with a Canadian bank, then moved to a hedge fund, followed by a family office and then finished my career in wealth management. I was 20 on my first day on Bay Street. I will forever remember. I had worked so hard to get there, from a small French-speaking town in Québec. Getting my CFA and CAIA designations by 25 was another important milestone. I was a young man with a dream, wanting to make it big. However, life was about to teach me a painful lesson. Before conquering the world, a man must first conquer himself by going into the depths of his own abyss. Only then may he shed his naivety and become a man truly able to love.For the last four years, I have been living in a yurt in the boreal forest, approximately 100 kilometres away from the closest paved road or grocery store. In a forest full of birds, just beside a lake full of fish. For water, I go to the creek. For heat, there is plenty of white birch and quaking aspen around. If I need anything in town, I have plenty of money for my needs. I am now 30, in love, and as free as the birds in the skies, so what else can I ask for? In all humility, and in all gratitude, I say thank you to this grandiose symphony we call life.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.