Does Micron deserve to be your top pick, though? Focusing on the short term, Danely predicts that Micron will beat earnings expectations (for a $0.26 per share loss) and raise guidance when reporting Q2 results next Wednesday. DRAM prices look strong, and Micron is shipping a lot of high-priced, high-bandwidth memory chips (HBM) to customers ordering AI systems from Nvidia.

Micron probably won’t be profitable this year, but earnings could race past $10 a share by 2026. Citi thinks the stock deserves a 15x multiple — $150 a share. And while this is a 50% bigger multiple than it usually gets at peak earnings, Citi could still be right. Two semiconductor cycles ago, Micron earned $11.51 per share in 2018, and by all accounts, this current AI revolution is a lot bigger than the expansion back then.

What worries me, though, is that everybody already knows AI is big. Nvidia’s supersized profit margins leave no doubt about that, and Micron’s competitors SK Hynix and Samsung — both several times Micron’s size in the crucial HBM market — aren’t likely to give up their market share to Micron without a fight (and a price war).

With everyone producing HBM chips at breakneck speed, the seeds of the next semiconductor cyclical slowdown are being sown already today. The risk inherent in buying Micron right now isn’t that it might not “go to $150.” It’s that when the downturn arrives … it might not stay there very long.