Bull v. Bear: Is Micron's (MU) Rally Just Getting Started?

追加: 2026-05-13

[00:00:02]Welcome back to Fast Market here on Schwab Network. Shares Micron taking a step back today after a monster move in memory over the past year. Is the market reassessing demand which is hot until it's not or supply concerns or maybe it's just too crowded or is memory on sale? Analysts are overwhelmingly in the bullish camp on Micron. The street high target is a thousand. Over at DA Davidson, analysts there argue that AI has disrupted the traditional boom and buzz cycle of memory, creating a structural shift that will sustain higher pricing for several years. Which bank also recently matched that target.

[00:00:38]So, it's not a lone wolf. Still, not every analyst is on board with a four-digit price tag. On the more cautious side, Goldman Sachs has a target of 400. All right, time now for the tugof-war on Micron. For that, let's welcome back in our co-host Kevin Hanks and Joe Misola. Guys, it is bull versus bear time. So before we get to your example trades, we got to get your thoughts on Micron. Joe, I'll start with you. Your take.

[00:01:01]>> I'm gonna say something that's downright shocking. After a 60% rally in the last 3 weeks, the shares might not be expensive. Now, nominally, absolutely.

[00:01:12]Right. You go from what 540 to 8 uh what 8 830 or something like that as as the as a near-term high. Uh or 820, excuse me, as the near-term high. that that's a what we call a parabolic move. It's not something that happens very often and there's a good chance if not a a strong chance that you see a bit of a retracement in the shares. You're seeing that down today about $70 and uh I wouldn't be, you know, surprised to see even even more just kind of given the fact that uh you you saw this thing move so quickly. But, you know, Diane, we've talked about this before. Kevin, we talked about this before. When you're looking at growth stocks, especially some a company where revenue and earnings growth have also kind of been exponential and they are in a they're in an industry where there's high demand, low supply, and they are at the forefront in terms of delivering that.

[00:02:03]And that's the the memory product. um a PEG ratio on this stock right now, believe it or not, given the rally that it's at is still under one. You know, you it's around 0.5. So, the price divided by earnings, right? So, the PE divided by the expected growth rate over the next 3 to 5 years is under one. And that's, you know, traditionally by fundamentalists that might be considered uh relatively inexpensive. But I use that word relatively, right? Because we've just seen such a monstrous move in this stock. Here's an example. In one year, the stock has gone from 90 up to 830. And what I did is I looked at um the Fibonacci charts on this. And I I drew it from the low from 90 up to the high that we saw uh right before this last big move. And that was around 540.

[00:02:49]So that's the 100% on the top and the zero on the bottom. You get that move, the extension that takes it up. That extension took it all the way up to the 818 level on the nose right at that 161.8%.

[00:03:01]We hit that. We've been pulling back a little bit. you know, today's move is a pretty pretty wide candle. Um, it's got down to just about the halfway part of that that big green candle that we saw two days ago. Um, I think if it holds there, it probably, you know, can can consolidate a little bit, the stock could definitely use some consolidation given the move that it's had. But if it fills if it kind of moves past that latest green candle and try and makes it way back makes its way back down, I wouldn't be surprised to see a 650 600 test something within that range because uh just because of how quickly the stocks move to the upside and and here's the thing that might actually be okay as long as you know you're not somebody who bought it yesterday at the high. uh this might be an opportunity for you to kind of get back into uh or you know if investors are interested in getting into this uh into this stock after a pullback given this meteoric rise.

[00:03:51]>> Yeah, you're not happy if you bought it yesterday, but who knows where it can go from here. Kevin, your thoughts.

[00:03:57]>> You know, I think this is a classic de definition of peak cycle risk, right?

[00:04:04]Because remember micron is in many ways trades and acts like a commodity and right now there's bottlenecks. There's tight supply and that leads to higher prices. But you come to 2027 and 2028 when more capacity expands and these prices are going to come crashing down and these bottlenecks are going to loosen up and this thing could trade like the historical commodity that it has. And so that's the concerning part.

[00:04:37]Now AI demand, it's off the charts.

[00:04:41]Demand for memory with AI is off the charts. But remember, it's demand and supply. If all of a sudden, come 2027, there's this large amount of supply, these prices are going to come down and their margins are going to come down and things are going to look a little different. We're not there yet. And but it was an 85 on the relative strength indicator. Now, it's still a 71. Even though the stock is down 9%, it's still above 70 on the relative strength. This is just a stock that was overbought and you know eventually there there there's going to be less tight supply, less bottlenecks and so you've just got to be prepared for that. Joe's right. It's run from 90 to over 800.

[00:05:28]>> So let's get into the example trades.

[00:05:30]Joe, let's start out with yours. What's your approach today?

[00:05:34]>> You know, it's a I I I sold the put spread, so it's considered a bullish trade. Uh, but I gave myself a lot of room on this just because the, you know, the expected move in this in the stock is just gigantic right now. I mean, if just look at the 3-day expected move for the stock is $62 up or down. Well, we moved 75 today. So, we've already exceeded that 3-day move in in the first half of the trading day. So, it's a volatile stock and but it can explode to the upside, too. So, what I looked at particularly was the June 26 and right now I think expectations are for Micron to release earnings that week. I believe on the 24th. So, it is an earnings trade. Uh, and I'm selling the 540 530 put spread. So, uh, you know, vertical put vertical spread for about $2. So, basically, uh, we're looking at a break even that would take us to 538. That is 13 or $180 below where we're currently trading. I know that sounds crazy, uh, but that's basically the expected move between uh, now and that expiration. Uh so you know it's um it goes back to this idea that I was saying when you got a stock that's moved this far this fast for it to come back down take a little bit of a breather before it it it makes it its next run up is healthy. So some consolidation at this point u I I think the key for me and I and I and I appreciate you guys showing that chart I put up there a little bit earlier is that 21day exponential move that average right there I think is around 530 or so.

[00:07:04]Uh, so that kind of uh aligns with where this is. It's it's a little bit um below where your break even would be on this, but I I know that that's still a long ways to go from where we're at right now, but who would have thought a $90 stock would turn into a $720 stock in a year. So, you never know.

[00:07:23]>> Joe, I I think this is what using the math on this finger swim platform gives you. You've gone out to June 26. You've given yourself 45 days, but you are, you know, very close to about $200 below where the stock is trading in line, by the way, with the expected move of about 206. Now, it's moving very dynamically.

[00:07:48]So it could be more than that or less than that by the end of the day. But helping with that strike selection, doing a high probability trade given and and this is what options allow you to do. You've got a passively bullish bet on but you're not be you know you're you're not being a hero on this one.

[00:08:10]You're giving yourself you know $200 on the downside where you could still be profitable roughly around that. So you've given yourself a high probability. You're not selling something $10 or $20 below the market.

[00:08:23]You're talking about $200 almost $200 below the market. It's 180 something around there. So that is the ability that you can do using probabilities. And remember the trade-off is you collect a little less but the probabilities go higher. If you were to move those higher the premiums would go up but the risk would go up as well. It's just that's the way you use the math and options and use the expected move, the implied volatility to help you there. Joe, I did something a little bit different. Mine is a bearish trade, but I looked at something. I went to the May 29th, which if you look at it, it's a little less time, only 17 days, but look at the expected move. $130 in either direction out to May 29th.

[00:09:13]$130. Think about a $100. I did the 750 650 call vertical and then I sold the 650 630 put vertical. I'm sorry, they're all put verticals. Bought the put vertical, sold the put vertical doing the unbalanced put butterfly. Now, this $100 wide uh unbalanced butterfly cost you about $3500 35.40. It's trading 42 now because now you can see how these things can move.

[00:09:48]My $3,500 is now $4,200. Now, can you move the strikes? Of course you can. The stock has moved a lot since we we we put these trades in. So that now you're seeing how these trades can move. But Joe, this one is a bearish play. Looking for a move on the downside. I I played with the expected move there, but what I really did was look for about a $100 move. I've got some of it already, Joe.

[00:10:15]>> Yeah. No, you have. And And this is one of those setups where we could theoretically both be right on the trade. Uh as long as the magnitude of the move stays within a certain level.

[00:10:26]So, you know, basically, you're playing down uh to your short strike. That's where you want that's where you want the stock to go. That's where this thing maximizes in value, but you still got a lot of uh potential wins all the way down because of the fact that it's unbalanced. Um, and with my trade, I think it it can perform as well, too, as long as it uh as long as we don't go dramatically below 540. So, this big run up and kind of the movement that we've seen today could lead to either some consolidation or a pullback further in the name. I don't think either of these trades are calling for catastrophic moves, you know, where the stock getting cut in half. you know, the the the possibility of this thing pulling back and at least testing some of those uh some some of those recent levels just just given the the the velocity of the move.