Micron Reports Results… And Sights & Sounds From Robinhood’s Hood Summit 9/30/26

CNBC's "Fast Money"

The episode explores the significant impact of Micron's recent earnings report on the semiconductor and AI trade, highlighting massive year-over-year growth

Key takeaways

• Micron reported third-quarter earnings growth exceeding 1,000% compared to the previous year.
• CEO Sanjay Mehrotra anticipates a tighter memory and storage market for 2027 and 2028 due to rising demand.

Main topics

• Micron Earnings & AI Trade
• Federal Reserve & Interest Rates

Notable quotes

AI is here, transforming how we work, live, and lead.

Conclusion

The episode highlights a market caught between the immense technologic

Transcript preview

Speaker 7 (0:00) AI is here, transforming how we work, live, and lead. And the women I talk to aren't waiting for the future, they're shaping it. I'm Julia Boorstin, Senior Media and Tech Correspondent at CNBC. This is CNBC Changemakers, where I talk with the female leaders transforming business as AI reshapes the world. Follow and listen to CNBC Changemakers, Women Leading in the Age of AI, wherever you get your podcasts. Speaker 4 (0:30) And live from the NASDAQ market site right here in the heart of New York City's Times Square, this is Fast Money. Here's what's ahead. Micron on the move. All the headlines for the company's earnings and guidance. What it means for semiconductors, the AI trade, and more. Do we call this the end of saying after hours trading? No. We'll get to that. Yes, no. Robinhood rolling out, round the clock buying and selling. We'll get the implications for the market and for other exchanges and let Tim make up his mind. A bullish call on Target. Bank stocks wrapping up a miserable month and surging cyber as AI stocks just keep moving higher. You've no doubt got questions and we are here for you. Hi, everybody. I am Brian. I'm in for Melissa. Coming to you live from Studio B right here at the NASDAQ and on your desk tonight, we've got Tim Seymour and Steve here on set. And from the aforementioned Robin Hood Summit in Houston, Texas, sitting together, we've got Dan Nathan. and apparently Colonel Guy Adami. Gentlemen, welcome. It's great to see you both. All right, there's a lot to get to. And we begin with the latest on the read on the AI trade, and that is coming out of Micron. Shares, giving back a little bit of the earlier gains, are still up, but only up about a half a percent. This after the memory chip maker beat on both the top and bottom lines. The conference call and headlines, they're currently underway and happening. Seema Modi's been listening in, so she's going to jump in and give us a little flavor of some of those details. Seema. Speaker 7 (1:58) Brian, another impressive quarter for Micron with third quarter earnings growing over 1,000 % from a year ago. Yes, slightly slower than the growth rate it saw in the third quarter, but still commendable given the concerns about memory cycle peaking. CEO Sanjay Mahotra on the call saying memory and storage market will be much tighter in calendar year 2027 and 2028. So it remains an industry constraint, he says, by a lack of supply due to rising demand. He also mentions autonomous cars and robotics as tailwinds. He also said we do not have a line of sight when supply-demand equation balances out and that capex will increase in 2027 as it adds more capacity here in the U.S. and overseas in markets like Singapore. In fact, it just poured concrete on its first New York fab with initial wafer output expected in about four years. The stock, interestingly enough, basically flat after gaining a 270 % this year. Exclusive sit-down with Sanjay Mahotra, CEO, tomorrow morning at 10 a.m. All right, Speaker 4 (2:55) Seema Modi, Speaker 7 (2:56) I Speaker 4 (2:56) know you've got to jump back on that call. We may see you again. Seema, thank you very much. We don't know a whole lot right now, Tim, but of what we do know or just the stock in general, what do you think? Speaker 2 (3:05) I think it's good. I think the margin profile is what we really should be focused on because the 11-fold growth in data center is not something you're going to have year over year out two years, I don't think. But the margin profile is very important. Pricing, obviously, longer-term contracts. I think what's been fascinating from the market's perspective is that the memory names have kind of taken a step back behind the CPU names in the month of September, although it was a very good month for Micron. And if you follow the KOSPI in Korea, it's another way of just kind of gauging what's going on. going on in the memory space. And we also know that there are other players out there ramping up demand, whether it's CMXT that we've been hearing more about out of China. The story is not, I think, without turbulence ahead. And I'm not chasing Micron here, but there was nothing wrong with this print. Speaker 4 (3:50) You know, Steve, we look at a 10-year chart of Micron Technologies and from... Basically, eight and a half to nine years of those 10 years, the stock did almost nothing. I mean, you could trade it a little bit, make money. Trade it right with DRAM. Forty to seventy dollar range for six or seven years. It was dead money. Took off last year. It's gone from sixty dollars to eleven hundred dollars in a year. And I'm not taking anything away from Mike Braun. It's made a lot of money for its investors and employees, people in Idaho. Speaker 1 (4:17) Yeah, that's a hell of a move. It is a hell of a move. But when you what do we hear yesterday at the White House that there's going to be a lot more agents? Look at that chart. Look at look at that Speaker 2 (4:25) chart. OK, that may be more than the GDP of Idaho. Sorry, with all due respect. No, Speaker 4 (4:30) I mean, listen, it might be. My point is anything about the valuation yesterday that concern. Speaker 1 (4:36) Well, there's there's no problem with the valuation in my crowd. The problem is, when does the story over? But the story. I would have thought that it would have backtracked a lot sooner than it has. It has come off the highs. But I actually think I'm reversing now. I think it could actually go higher because agents create token demand. Tokens are inference and inference runs on memory. So if we're going to have a battle over the bots, Micron is probably going higher from here. And Speaker 4 (5:08) Dan, Nathan, I'm going to reverse myself because even with that chart. that I showed you. I'm looking on CNBC.com and FactSet and everything else. Ford PE is still historically low on Micron, even at 1,100-whatever a share. Speaker 6 (5:22) Yeah, so that doesn't really matter. And I think you know that, Brian. I mean, this is a company that lost money three years ago in 2023. They had negative gross margins. And so now they're able to have all this pricing pressure. It's a supply-demand situation. Those beats that we're talking about that took the stock from $100 to $1,200, they're behind them. I mean, like the magnitude of those beats. If you just look at the quarter they just reported, they basically beat consensus by about 5%, 6 % of earnings and sales. You look at that guidance that they just gave for the current quarter. and maybe that's up 8%. So the days or the quarters of having this 50%, 100 % kind of beats, they're gone. So at this point, in that margin profile that Tim talked about, he's 100%. They are taking. They are taking right now. They have the ability to do that. They have the pricing power. But I guess into... To Steve's point about inference and all of the pricing dynamics that you have with tokens, yes, that's going to be great. The agent stuff is going to be great for memory. But I guess the point is, where does the stock go from here based on everything that we know and the fact that we're not going to see the levels of beats that we've seen before? I think investors are going to start pricing in best case scenarios. And I think that's one of Speaker 4 (6:33) the Speaker 6 (6:33) reasons why you have such a muted reaction in the aftermarket right now. Speaker 4 (6:37) You got 51 analysts, Sky Dommy, that cover Micron. You got 49 buys or strong buys, a couple of holds, no sells. The stock's done that. I mean, it's made a lot of people a lot of money. I'm not trying to be a negative Nelly here about Micron. I'm glad it's made a lot of people money. But I'm worried about the next 12 months, not the previous 12 months. What do you think? Speaker 3 (6:58) Why would you be a negative Nelly? And watch what I do here, Brian. I know Tim will get this. There's no small potatoes. Speaker 3 (7:05) about this quarter. See what I did there, Brian? I'm sure you did. Mike Braun initially funded with Speaker 4 (7:10) J.R. Simplot money from potatoes. Speaker 4 (7:15) I'll take random Micron trivia for 600, please, Guy. For 500. Speaker 3 (7:19) But the reality is, Steve mentioned it. What did they call that thing at the White House yesterday? A gaggle? And when they all walked out hand in hand and talked about sort of putting their foot on the gas pedal, continuing to put their foot on the gas pedal, that is obviously very supportive of the entire trade that Micron finds itself at the center of. The move should have taken place either today or, again, in the after hours with this release. It's an extraordinary number, 86 percent margins. or nothing to sneeze at, but there's the old saying from Amazon, your margins are our opportunity. And although competition is not coming tomorrow, competition is coming. So we know all the numbers, and you have to ask yourself, a stock that was supposed to move 7 % or 8 % given the options market is not moving at all. And to Dan's point, maybe there's something to glean from that. Speaker 2 (8:07) Well, I would look at what's going on in the semi space and let's just throw that whole group that are leased in the SMH, but including memory as being the one part of the market that's actually working. As much as I don't necessarily want to chase and be the next dollar in a micron, I can tell you that the chart on micron and I can tell you what semis did in September in a quarter that was pretty lackluster for the rest of the market. We're going to talk about that in a second. But I just feel as if this is a space and this is a trade that continues to have legs behind it. It's a trade that continues to outperform the rest of the market. So as much as I'm not chasing memory here and as much as all we keep hearing from Samsung and SK Hynix is that they are building out more memory and more capacity. And, you know, it's actually pretty exciting for the world that we're also building more out here and that Micron is very much involved. They broke ground in cement in New York City. That's great. I do think supply is an issue at some point. I think the market's not going to wait for that. Speaker 4 (9:01) Yeah. I mean, the CEO is saying he sees a tighter supply demand environment coming. I don't know if that's good or bad, though, Steve. Speaker 1 (9:07) He's saying that these are supposed to be commodities. Well, these are making up chips. It's Speaker 4 (9:10) tight supply? Yeah, Speaker 1 (9:11) these are. I Speaker 4 (9:12) don't Speaker 1 (9:12) know. Well, that's the trillion dollar question. When does this supply actually hit the market? But it doesn't sound like it's coming anytime soon. And we are talking about a three horse race. So there's enough room to send these things higher. You know, I look at that margin. I get what guy's saying, but I look at the actual share out of the three players and there's plenty of room for Micron to gobble up someone else's share. So I think if you look at it through that prism, that chart looks steep, but it looks like it can climb again. All right. Well, the stock is Speaker 4 (9:47) down a touch right now. I'm not going to make too much of a 1 % move. It's at $1,055 because it was a $45 stock. just a couple of years ago. All right, in the meantime, the macro market's taken a bit of a turn down later on in the session. I mean, the NASDAQ did close higher, but not nearly as much as it was. President Trump posting on True Social that former Federal Reserve Chair Jerome Powell should resign from the Federal Reserve over failures in managing the renovations of its headquarters. Remember, Powell no longer the chairman, but he is