Latest / Best of Business / Sam Dickie: Fisher Funds expert on Micron unveiling their third-quarter earnings

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Sam Dickie: Fisher Funds expert on Micron unveiling their third-quarter earnings · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed B.
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  Speaker 2: Now you'll remember a few weeks ago we did a
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  Speaker 2: deep dive with Sam Dickey from Fisher Funds on the
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  Speaker 2: memory chip shortage, the real bottleneck which sits behind the
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  Speaker 2: AI boom. Well, Micron, the US memory giant, just reported
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  Speaker 2: earnings hot off the pres and Sam is with us
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  Speaker 2: on that. Hi, Sam, Hey, yeah, that has it going
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  Speaker 2: so I'm very well, thank you. So in that Micron result,
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  Speaker 2: did the memory story shortage still? Is it still playing through?
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  Speaker 3: Yes? Micron crushed earnings expectations. And remember, every AI chip
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  Speaker 3: needs a stack of memory because the queries and projects
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  Speaker 3: you and I give Claude and chet gpt away way
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  Speaker 3: more complex now and require much higher computer and memory.
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  Speaker 3: But last time we spoke, we said it's the tightest
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  Speaker 3: memory market in decades. Well, Micron told us today it's
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  Speaker 3: even tighter. They said supply won't catch up with demand
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  Speaker 3: until twenty twenty eight.
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  Speaker 2: WHOA, now, I mean is that realistic? How long can
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  Speaker 2: this go on for?
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  Speaker 3: Well, here's the tension, so Micron says it can go
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  Speaker 3: on much longer. But underneath, we're seeing very bubbly signs.
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  Speaker 3: So Korea and Taiwan, where several of these memory type
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  Speaker 3: players are listed, are seeing a retail frenzy. So people
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  Speaker 3: are borrowing to buy memory stocks at levels never seen before.
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  Speaker 3: And we've talked about how narrow the rallies in the
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  Speaker 3: US here that are carried by fewer and fewer stocks.
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  Speaker 3: And then crucially, you know we talked about this before
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  Speaker 3: memory so Nan and d Ram you can google that
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  Speaker 3: that's the memory we're talking about. They are commodities. And crucially,
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  Speaker 3: we're seeing demand destructions. So Apple CEO Tim Cook just
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  Speaker 3: this week said unfortunately, price increases are unavoidable. The situation
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  Speaker 3: has become unsustainable, so he's raising iPhone and iPad prices
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  Speaker 3: because memory costs are too high. And Uber, for example,
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  Speaker 3: who's a big corporate user of clawed AI, is complaining
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  Speaker 3: about the cost of AI too. So when the biggest
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  Speaker 3: customer start to push back, we really need to pay attention.
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  Speaker 2: What does this mean for investors?
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  Speaker 3: Sam Well? I think firstly that the Micron result proves
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  Speaker 3: the AI cycle supercycle is real, but that doesn't mean
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  Speaker 3: it lasts forever. So secondly, memory supply will come it
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  Speaker 3: always does, and it's so profitable right now. I mean,
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  Speaker 3: Micron is making almost ninety percent profit margins that every
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  Speaker 3: memory maker on Earth is fast tracking new capacity. It
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  Speaker 3: just takes a week while to get these big facilities
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  Speaker 3: off the ground. And so that sort of brings us
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  Speaker 3: to what you and I have talked about before. The
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  Speaker 3: best cure for high commodity prices is high commodity prices.
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  Speaker 3: So they strangle demand and courage supply, and then the
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  Speaker 3: memory commodity bubble eventually pops. But Micron is telling us
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  Speaker 3: that is not today either.
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  Speaker 2: Yeah, interesting stuff, Sam, Thanks as always, it's interesting to
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  Speaker 2: talk to you, Sam Dickey of Fisher Funds.
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