Key insights
- The author believes Micron (MU) is a key AI play due to memory (HBM) being a bottleneck for LLMs. They suggest a strategy of combining stock ownership with debit call spreads to capitalize on further upside, targeting a potential market cap of $1.5T-$2T. This bullish outlook on a major semiconductor company has a moderately positive influence on US equities.
Who would've thought a small company out of Boise, Idaho would end up being the AI play of the year. I was in last year and made a killing but sold out - completely missed the the massive rally since 4/1. Anyone else in a similar position and looking to get back in?
The thesis has gotten stronger. It appears that there is a lack of innovation in LLM architectures this year (no "DeepSeek moment") and as such memory (especially HBM) continues to be a critical bottleneck for both training and inferencing.
I think the best way to play this now given the potentially limited runway is a combination of stocks and debit call spreads for convexity. Keep rolling the call spread as it continue to hit higher milestones, potentially $1.5T or $2T.