We’re starting a position in a memory maker that was just put in the Bullpen
Shortly after the opening bell, we will be initiating a position in Micron Technology , buying 25 shares at roughly $872 each. Following Tuesday’s trade, Jim Cramer’s Charitable Trust will own 25 shares of MU at a weighting in the portfolio of 0.5%. We’re calling up our newest Bullpen addition, Micron, to the portfolio. This memory chip maker is one of the more volatile names in the market, prone to big swings in both directions. For that reason, we are intentionally starting this position off on the smaller side. The broader memory semiconductor market is dominated by three big companies: Samsung Electronics and last month’s big IPO, SK Hynix — both are South Korean companies — and Idaho-based Micron here in the U.S. In last Thursday’s Homestretch , we put Micron in the Bullpen and discussed how DRAM and NAND demand have significantly exceeded supply because of the artificial intelligence AI boom. This ongoing shortage has led to huge price increases and exceptional margins at Micron. We wrote: Within the memory market, the two main products to know are NAND and DRAM. Think about NAND as more of a longer-term storage, like a flash drive. DRAM is what’s considered working memory, like the RAM in your computer. A specialized form of DRAM is HBM, or high-bandwidth memory, which is the key enabling technology for modern AI workloads. The key concern with Micron is that the memory industry has historically been a boom-and-bust business, and many investors believe this cycle won’t be any different. That skepticism helps explain why the stock trades at an extremely cheap price-to-earnings multiple of [less than 6 times calendar year 2027 estimates] despite strong fundamentals. However, Micron has been trying to ease those concerns by signing strategic customer agreements, or SCAs, to fundamentally change its business model. Micron announced 16 SCAs at the time of earnings in June, with pricing ceilings and floors. At the KeyBanc Technology Leadership Forum on Monday, the company announced that it signed more agreements since then. Sumit Sadana, Micron’s executive vice president and chief business officer, also described an increasingly tight demand environment, expecting calendar year 2027 to be even tighter than 2026, as demand continues to grow faster than supply. The combination of more agreements with a strong pricing environment suggests margins will remain elevated and earnings will grow sequentially for a handful of quarters. We’re initiating our Micron position with a $1,100-per-share price target, which is below the stock’s all-time closing high of $1,213.56 on June 25. MU YTD mountain Micron YTD (Jim Cramer’s Charitable Trust is long MU. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
