$MU.US #MU Why did the NVDA earnings report far exceed market expectations yesterday, and why did MU fall against the trend~~
There’s one very important reason: NVDA raised its earnings guidance, but due to the cost of memory chips, its profit margin also declined. Memory prices have risen so high that even Nvidia can’t fully pass the increase on to customers.
In the earnings call, Nvidia’s CFO explicitly stated that the company is facing an “extreme memory pricing environment.” The price increase is higher than previously expected, and it will continue to rise. As a result, gross margin is expected to fall to 71%–72% in the fourth fiscal quarter.
Micron’s long-term AI storage thesis hasn’t been broken by Nvidia’s report, but storage transactions have moved from the first phase—“higher prices bring more profit”—to a second phase: “prices are too high and suppress customer demand.” The cycle may not be over yet, but the acceleration in price growth and profit expectations could already be peaking. What institutions sold yesterday was precisely this acceleration.
There’s one very important reason: NVDA raised its earnings guidance, but due to the cost of memory chips, its profit margin also declined. Memory prices have risen so high that even Nvidia can’t fully pass the increase on to customers.
In the earnings call, Nvidia’s CFO explicitly stated that the company is facing an “extreme memory pricing environment.” The price increase is higher than previously expected, and it will continue to rise. As a result, gross margin is expected to fall to 71%–72% in the fourth fiscal quarter.
Micron’s long-term AI storage thesis hasn’t been broken by Nvidia’s report, but storage transactions have moved from the first phase—“higher prices bring more profit”—to a second phase: “prices are too high and suppress customer demand.” The cycle may not be over yet, but the acceleration in price growth and profit expectations could already be peaking. What institutions sold yesterday was precisely this acceleration.