Micron’s Beat-and-Raise Quarter Brings Support for Multiple Portfolio Holdings
Amid bullish signals, but an increasingly skewed risk-reward tradeoff, we’ll continue to heed portfolio discipline.
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As we approach Thursday’s opening bell, the S&P 500 looks to continue its upward trajectory toward its February record high, spurred on by last night’s beat-and-raise quarter from Micron Technology MU. That would push the S&P’s move since the April low well past 20%, while the analogous move for the Nasdaq Composite is well past 30% over the same period.
These market moves have enabled the Pro Portfolio first to recover lost ground and eventually move past the S&P on a year-to-date basis. While something to be enjoyed, it would be a mistake for us to ignore our investing discipline.
At a minimum, a continued melt-up will push the Pro Portfolio’s positions in Nvidia NVDA and Marvell Technology MRVL past the 4.5% mark in terms of weighting, and that will lead us to do some prudent profit taking in the very near-term. It also means we’ll continue to keep a close eye on the technical setup for the S&P as well as the Nasdaq, balanced against potential market headwinds that could be brewing. Those include next week’s deluge of June economic data, potential slippage in President Trump’s fiscal stimulus bill and trade deals, and what that could mean for the June-quarter earnings season.
Because the risk-to-reward tradeoff in the market is increasingly skewing toward risk following the cumulative move over the last several weeks, our likely focus near-term will be on refreshing the Bullpen as we close out the current quarter and enter the next one.
Micron’s Quarter
For its fiscal third quarter ending in May, Micron’s total revenue rose 15% sequentially and 37% on a year-over-year basis to $9.3 billion, led by all-time-high DRAM revenue, including nearly 50% sequential growth in high-bandwidth memory (HBM) revenue. From an end-market perspective, data center revenue more than doubled year-over-year, reaching a quarterly record, and consumer-oriented end markets had strong sequential growth.
For its current quarter, Micron’s guidance pegs revenue between $10.4 billion-$11.0 billion, up nicely on a sequential basis and dramatically compared to the $7.75 billion delivered in the August 2024 quarter. It’s also stronger than the $9.9 billion the market was looking for.
For 2025, Micron continues to see significant growth in AI servers, PC market units growing in low-single digits, and smartphone volumes up low-single digits. As we think about those figures, it would behoove us to remember end market seasonality as well as the phase out of Windows 10.
Potential Price Target Adjustments on the Horizon
While we’re inclined to do some prudent trimming of NVDA and MRVL shares, Micron’s outlook keeps us bullish on those names as well as Qualcomm QCOM, Universal Display OLED and Eaton ETN. June monthly revenue figures from Taiwan Semiconductor TSM and Foxconn, and their June quarter results, as well as capital spending comments from Big Tech players in the coming weeks, will lead us to revisit some of those price targets. June-quarter earnings call comments about corporate AI adoption will lead us to do the same for other Pro Portfolio holdings.
At the time of publication, TheStreet Pro Portfolio was long MRVL, NVDA, QCOM, OLED and ETN.
