Micron is near its performance peak with unsustainable margins; taking partial profits is recommended due to potential future demand and supply changes.

But what about one of the most popular companies in the field of artificial intelligence today? It is Micron, a company with a market capitalization of $1.2 trillion. It's hard to look at Micron's charts without being extremely impressed by what's happening in its business.

Let's take a look at operating profit. As you can see, revenue has increased significantly, but what followed? Operating profit and gross profit. This is because the company simply raises prices.

It does not increase the quantity of products it produces, nor the quantity of memory it produces, nor does it increase its costs, but rather it adds this money to its net profits.

The market believes this will continue in the future. I think it's hard to imagine a world where Micron doesn't achieve outstanding results, at least in the next few chapters.

But investors should think at least for a period of 6 to 18 months. What will the work look like then? Will they be able to maintain a gross profit margin?

Their gross profit margin is 86%, while historically, let's look at Micron's annual figures. Historically, they have never come close to this number. We can go back to 2005. The gross profit margin peaked at around 60%, but periodically falls below zero.

This is a commodities market, and what happens in it is that all the demand for 2026 was already factored in at the beginning of the year. If you are Nvidia, Apple, or Amazon, the chips you designed for 2026 will not change by September 2026.

What will change are the designs of the next-generation chips. Therefore, their reliance on high-bandwidth memory (HBM) will decrease.

This memory has become extremely expensive, and the challenge facing traditional Dynamic Random Access Memory (DRAM) is...you are converting silicon chips from DRAM to High Frequency Random Access Memory (HBM).

Therefore, if the demand for HBM starts to fall compared to the supply, this will increase the supply of conventional DRAM, which will restore market balance.

This is from the demand side. Prices have risen significantly, which will drive demand for chips to be redesigned differently, such as putting less memory in iPhones, for example.

This will lead to a slight decrease in demand for memory, but more importantly, the new production capacity that will come online, especially in 2028 and 2029.

So, as we enter 2027, the market's focus will be on this: how many new silicon chips will be released in 2028 and 2029? What is the supply situation from China?

We know that large companies invest in capital expenditures to increase their production, trying to take advantage of this market, but this is what happens in the commodities market.

No single company is capable of that. They will not be able to control the supply forever, but they will not be able to control the demand.

So, I think we're approaching the peak of Micron's performance, and the stock looks very cheap. If we look only at the price-to-earnings ratio, we find it is currently only seven. This looks very cheap for Micron stock.

But remember, if the gross profit margin drops from 83% to 40%, their profits will not only drop by 50%, but by 90%. They might lose money at this point.

So, the real danger for Micron is that if its best days are over, and if the demand situation starts to change over the next couple of years, remember those long-term contracts they sign, which include price restrictions.

This means they cannot raise their prices above a certain limit, and customers will have to pay a set price. This will protect part of their profitability, but if the market starts to notice a decrease in demand, and if spot market prices start to fall, there will be dire consequences. The market will react to this.

So, I think withdrawing some profits, if you are a shareholder in Micron, is a very good idea today.

Among the companies that appear to be overvalued in this context are Oracle, Korwef, Micron, Amazon, and Tesla. I believe all these stocks are