Two very different stories… one riding the AI wave, the other proving steady compounding still wins.
The market is watching two giants this week. Micron Technology (NASDAQ:MU) tests whether memory has entered a new supercycle, while Costco (NASDAQ:COST) gives us a read on the consumer and the power of recurring membership economics.
Micron… How is it Up 78% YTD?
Micron heads into earnings after the close on Tuesday riding a powerful AI-memory wave. Shares have ripped this year on surging demand for HBM3E attached to Nvidia’s newest accelerators, tight DRAM/NAND supply, and broad price strength across memory. Analysts point to record HBM demand (with 2025 supply largely spoken for) and rising pricing power as key supports.
What the Street is watching:
- HBM visibility: Micron is seen as one of the limited HBM suppliers, with next-gen HBM4 a 2026 driver; any color on capacity adds and mix is critical.
- Guide vs. AI runway: Recent notes flag upside risk to outlook on stronger cloud orders; investors want confirmation in revenue/bit growth guidance.
- Cycle vs. supercycle: Historically, memory runs in 1–2 year cycles, but AI is changing the slope. If HBM content per accelerator keeps rising and supply stays tight, the AI infrastructure buildout argues for a multi-year (call it supercycle-like) uptrend rather than a quick peak-and-roll.
Costco Thursday After Close… What to Watch For
The setup blends classic Costco defensiveness with quiet operating leverage: membership income growth, traffic resilience, and any update on fee dynamics remain front and center.
Why it matters now:
- Recurring engine: Membership fees have been a durable profit pillar, aided by retention and mix into executive tiers.
- Five-year compounding: Over the last 5 years, total return has surged more than 600%, underlining execution through cycles.
- Watch the mix: Commentary on traffic, e-commerce, and private-label penetration can signal how sticky share gains are in a softer inflation backdrop.
If management keeps the drumbeat on renewals and value, Costco's steady compounding story stays intact into year-end.
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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
