As our investment committee looks beyond the first wave of AI hardware, we believe Micron represents the most compelling 'Quality' play in the sector—offering a rare combination of technological leadership, strong financials, and high-margin structural growth. By investing in Micron, we are gaining exposure to the next level of investment in the AI evolution.

Micron is one of only three companies in the world capable of producing the high-end memory required for modern AI, and they currently lead the pack in power efficiency and performance. Without Micron’s specialized silicon, the world’s most advanced AI models simply cannot run.

The AI Engine:

To understand why Micron is so valuable, it helps to understand three key technologies that are driving the current semiconductor boom:

  • GPUs (Graphics Processing Units): These are the powerful "brains" of an AI system (made by companies like NVIDIA). Unlike a standard computer chip, a GPU can do thousands of calculations at the same time. However, a GPU is so fast that it often has to wait for the data to arrive from the memory or storage components of the chip and computer.
  • HBM (High Bandwidth Memory): This is Micron's star product. HBM is a specialized, high-performance memory that is physically stacked in layers and placed right next to the GPU. It acts like a massive multi-lane highway, allowing data to pour into the GPU so it can work at full speed.
  • DRAM (Dynamic Random Access Memory): This is the standard "short-term memory" used in every laptop, phone, and server. While HBM is for high-end AI, new DRAM (like DDR5) is required for "Edge AI” which allows your phone or PC to run AI features like voice translation or photo editing locally without needing the cloud.

Micron’s Critical Role: Solving the "Memory Wall" and Their Competitive Advantage.

In 2026, one of the biggest challenges in AI is the "Memory Wall." This refers to the fact that while processors have become incredibly fast, memory has struggled to keep up. Micron has solved this with its HBM3E and upcoming HBM4 technology.

Micron’s HBM uses about 30% less power than its competitors. In a massive data center filled with thousands of GPUs, that 30% saving translates to millions of dollars in lower electricity bills and less heat. This is why the world’s leading AI chip makers are lining up to use Micron’s components.

Investment Thesis: Why Own Micron?

As we often explain to our clients here at Beese Fulmer, we are Quality Investors. We evaluate investment opportunities with distinct investment criteria, built upon competitive advantage, sustainable profitability, predictable growth, and strong capital allocation.

Here are few key reasons to own Micron:

  • Sustainable Growth: The HBM market is projected to grow from $35 billion in 2025 to $100 billion by 2028, or an astounding 40% every year. As AI models (like ChatGPT or Gemini) get larger, they require even more memory. Micron sells more products for every single AI chip sold.
  • Profitability and Pricing Power: Unlike previous cycles, the current shortage in memory is structural and less cyclical. Micron is successfully negotiating multi-year contracts with high average selling prices, insulating the company from traditional memory price swings. Last quarter, revenue growth was up 57% from last year, margins added 4% more than anticipated, and earnings were up 20% more than analysts’ expectations. Earnings for 2026 are expected to hit new record with growth of over 200%. 
  • Predictability: By prioritizing enterprise and AI data center contracts, Micron has shifted toward a more stable, recurring-revenue-like profile compared to the volatile PC cycles of the past. Demand for AI memory is so high that Micron has already pre-sold its entire production capacity for 2026. This provides them with incredible predictability as we already know the customers are there and the prices are locked in.
  • Strategic Capital Allocation: Micron is using its record profits to build "Mega-Fabs" in the United States. Supported by the CHIPS Act, these facilities ensure that Micron will be the primary domestic supplier for the Western world's AI infrastructure, reducing the risk of global supply chain disruptions. Despite this heavy investment, Micron maintains a fortress balance sheet with little debt, and they continue to return cash to shareholders through consistent dividends.

Conclusion

Micron Technology has transformed from a maker of simple computer parts into a strategic gatekeeper of the AI era. Without their HBM and DRAM, the AI revolution would not be possible. For investors seeking a profitable, predictable, and competitively shielded way to play the AI boom, Micron represents a structural growth tailwind that is just beginning to accelerate.

 

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