Micron is entering what one Wall Street strategist describes as an AI-driven supercycle, a development he says directly challenges claims that the artificial intelligence trade is already exhausted or detached from fundamentals.
In a new post on X, James Thorne, the chief market strategist at the billion-dollar asset management firm Wellington-Altus, says market data from the memory chip firm Micron (MU) shows that AI bubble narratives are largely out of touch with reality.
“Micron is in an AI‑driven super‑cycle that could absolutely morph into a bubble, but on the numbers and valuation in front of us, the ‘AI is overvalued, and the cycle is done’ meme simply does not survive contact with reality. In a world where facts mattered, this print would put that narrative to bed; unfortunately, history shows facts, and Wall Street sentiment rarely moves in lockstep.
A Supercycle, not a Bubble.”
He says the company’s results display the classic markers of a supercycle, with guidance pointing to further upside rather than a near-term slowdown.
“The latest quarter and guide are exactly what an AI memory supercycle looks like: record revenue, record EPS, and record margins, with forward guidance pointing to even higher highs rather than a near‑term fade. Those are the hallmarks of a regime shift in earnings power, not an exhausted upturn dressed up with clever sell‑side language.
Valuation and the ‘AI is overvalued’ trope.”
In its latest earnings release, Micron reported $13.64 billion in revenue versus $11.32 billion for the prior quarter. Gross margin stood at $7.646 billion, with net income climbing to $5.240 billion, compared to $3.201 billion for the previous quarter.
Says Micron CEO Sanjay Mehrotra,
“Micron closed out a record-breaking fiscal year with exceptional Q4 performance, underscoring our leadership in technology, products, and operational execution. In fiscal 2025, we achieved all-time highs across our data center business and are entering fiscal 2026 with strong momentum and our most competitive portfolio to date.”
Thorne said Micron’s financials point to higher structural margins, a larger earnings base, and tangible leverage to AI demand across products and customers, all of which conflict with what he described as the prevailing Cassandra-style narrative.
“Objectively, MU’s financials say: higher structural margins, a much higher earnings base, and tangible AI leverage across products and customers. The Cassandra view – that this is a bubble that has already popped and that AI valuations are already detached from fundamentals – is simply not aligned with that data.”
The Wall Street analyst appears to be referring to the view of “Big Short” investor Michael Burry, who goes by “Cassandra Unchained” on X. Earlier this month, Burry said that the AI bubble looked an “awful lot” like the dot-com mania, as patterns that unfolded back then are playing out again today.
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