Just a few months after the big memory makers crossed the $1 trillion market capitalization threshold, some chipmakers are set up to reach $2 trillion, according to one Wall Street analyst. Ben Reitzes, head of technology research at Melius, said in Wednesday note to clients that memory maker Micron and CPU-focused AMD may both be on the path to a $2 trillion market cap.
AMD's $2 trillion viability is due to the renewed importance of the CPU within agentic artificial intelligence, according to Reitzes, as system architectures need more CPUs relative to GPUs, or graphics processors. "To achieve its next trillion, it will likely need to demonstrate that EPS power of $50+ is possible – meaning its 2030 target of > $20 in EPS needs to go a lot higher," he wrote.
AMD YTD mountain AMD ytd Micron's $2 trillion path is founded on computational efficiency gains in AI that come as more memory is used in systems. The thing holding Micron back is the traditional cyclicality of its business, characterized by boom and bust periods. "The 'memory' of memory's past is holding it down.
Just wait for these guys to buy back 25% of their market cap in 2027/28 – not even Jensen can do that," Reitzes said, referring to Nvidia CEO Jensen Huang. MU YTD mountain Micron ytd. Michael Burry, the investor famous for shorting the housing bubble that triggered the 2007-2009 great financial crisis, has recently taken the opposite view.
He thinks cyclicality is set to return to memory in force and that ramping Chinese memory capacity will alleviate shortages that have enabled tremendous pricing power and profit margins in the sector. "Over the next two years this shortage will blow off as production catches up, and memory will have a down cycle again," Burry wrote in a Sept. 22 Substack post.
Micron will report earnings after the bell on Wednesday. Market makers are pricing a 7% move for the stock after the close. Earnings of $31.72 per share and sales of $51.33 billion are expected, according to estimates from FactSet. Micron stock is up 0.8% as of noon ET on Wednesday. Shares are up 276% year to date, according to FactSet