MU is a high-quality long-term buy due to AI-driven structural changes and growth, though subject to cyclical volatility.

I agree. I will now move on to my choice, which is a stock that has also seen a remarkable rise over the past twelve months, and perhaps even over the past two years, and that is Micron stock.

Micron Technologies is valued at approximately $1.1 to $1.2 trillion, depending on when you watch this video, as the stock price fluctuates a lot.

You might think you missed out on investing in Micron because of its high price, but if we look at the bigger picture, and if we look at capital spending on artificial intelligence, which is a huge cycle happening right now, the projected figures for this year are just over $1 trillion.

For 2027, the figure will be close to $1.4 to $1.5 trillion. Growth is expected to slow to around $1.6 trillion in 2028, which are truly staggering figures.

When we look at Micron, what always comes to mind is: "Well, the name Micron is in the memory field. It's usually cyclical." And I agree with this. If we go back and look at what has happened over the past fifteen years or so, we will see upward cycles followed by downward cycles.

Now, there's no need to go back fifteen years. In 2023, free cash flow was negative. In 2023, just three years ago, it was expected to reach $25 billion in 2026, and perhaps a little more. In 2029, the estimated figure is $185 billion.

Let's assume we reach peak growth in 2028 or perhaps 2029. In my opinion, the situation here is completely different, as no previous company has ever experienced a similar period in which it achieved free cash flows exceeding $100 billion in just one year.

Why is that important? Let's assume we've entered a recession. Well, we are currently in a recessionary cycle, and this company has enormous cash reserves. It can, for example, distribute dividends or repurchase shares.

Incidentally, it is currently not allowed to repurchase any shares until December. I think that in mid-December or early December, they will be allowed to repurchase their shares, and with a forward price-to-earnings ratio of less than 10 currently, gross profit margins, based on the last quarter, are above 80.

I think operating profit margins are close to that as well.

I don't think it will stay at this high level in the foreseeable future, but still, if they see that the share price is too low, they will certainly buy back the shares. They may not wait until the first quarter of 2027 to announce the share buyback program.

Currently, memory companies are expected to generate more free cash flow than all major technology companies combined, which is an interesting dynamic at the moment.

But why is Micron still on the list now? By the way, Micron will announce its earnings next week. That will be very interesting. Its revenue is expected to grow by approximately 351%.

So, 351%, which is equivalent to $51 of the revenue generated during the fiscal year. Revenues are expected to grow by 200%, let's say 250%, in the next fiscal year by 90%, and in the fiscal year after that by only 13.6%.

Therefore, it is clear that analysts are currently expecting a significant slowdown in growth. That may happen, or it may not happen as quickly as analysts expect. Perhaps this is why the stock did not receive a high price premium, is that correct?

A company that is growing very rapidly and making huge profits, why is its stock price still trading at a single-digit future price-to-earnings ratio? This is illogical.

But as we know, the market is always looking ahead, so the market may already be looking to 2029 and 2028. Perhaps then growth will slow down. I have always maintained that capital spending growth will slow down.

Yes, all these companies, including cloud computing giants and chip manufacturers, will seek to improve memory utilization to increase their efficiency, because of course they do not want to pay exorbitant prices forever.

But that doesn't mean that companies like Micron, SK Hynix and Samsung won't be able to continue growing.

It is true that profit margins may decrease, but I still believe that returns will continue to rise. If these revenues eventually increase, they will consider it a huge gain. Currently, we know that HBM memory, which is high-bandwidth memory used by companies like AMD and Nvidia in their massive graphics processing unit (GPU) assemblies, is completely sold out for 2026.

They expect the supply shortage to continue beyond 2027.

The total target market size for HBM memory is estimated at over one hundred billion dollars. They told us that more than 75% of the projected demand for dynamic random access memory (DRAM) in 2027 will come from this expansion in the field of artificial intelligence.

So, if you think you were late in investing in Micron, remember that its numbers now indicate rapid growth. These numbers are constantly increasing, and I believe that once we reach the peak of this economic cycle, the company will have enormous cash reserves, meaning it will be able to distribute dividends, repurchase its shares, or invest to ensure its continued growth during recessions.

I think what's interesting is how much the business model of a company like Micron has changed. Much of that is due to the nature of the industry, isn't it? And how this industry has changed over the past two years.

I mean, this is an entire category of companies that have been repriced. The memory sector has long been a prime example of an industry with limited ability to set prices. As you know, there was a lot of pure commodity-based economics.

There have been cycles of boom and bust. This was perfectly normal.

If you invest there, and what we are seeing now, of course, there is still debate about whether memory has ceased to behave as a commodity or not, but it has certainly become one of the major obstacles to building artificial intelligence systems, and Micron is, of course, still one of the few companies well-positioned to take advantage of this shift and help alleviate this obstacle, so to speak.

So, not only is Micron running its business better, but the underlying structure of the entire industry is changing. I think it's a high-quality company, but it has seen a very different growth pattern, especially in recent quarters, than it did a few years ago, you know, if you've owned this stock for a long time.

owned this stock for a long time. So, as you know, I think what investors should be watching is that this stock will likely experience significant volatility, as we anticipate sharp fluctuations in the growth of the artificial intelligence market .

I believe this is a sustainable trend in the long term, but we are likely to see a slowdown at some point, especially with the many discussions taking place recently in the field of artificial intelligence about safety concerns and other issues.

So, I think this is likely to happen, but I don't think growth will slow down significantly in the long run . The slowdown may only appear superficially.

So, as you know, I think what investors should be watching is that this stock will likely experience significant volatility, as we anticipate sharp fluctuations in the growth of the artificial intelligence market.

I believe this is a sustainable trend in the long term, but we are likely to see a slowdown at some point, especially with the many discussions taking place recently in the field of artificial intelligence about safety concerns and other issues.

So, I think this is likely to happen, but I don't think growth will slow down significantly in the long run. The slowdown may only appear superficially.

Therefore, I think Micron is a great company to invest in this area, but it is understandable that anyone betting on demand for AI memory is aware that this field has historically experienced frequent boom-and-bust cycles.

As the artificial intelligence component declines, we are likely to see some significant drops, but I believe it is a great business sector in the long run.

Yes, and as I mentioned, next week's earnings report is likely to be one of the first times Micron leads the way in this area. While some might say it was a leader in artificial intelligence until last quarter, I believe that the current situation, with fluctuating expectations regarding artificial intelligence, could mean that next week will be a crucial moment for the company, and certainly for the AI sector as a whole.

Yes, and that's the point. You know, these stocks we talked about today, like TransDigm Group, Micron, and Marvell, are companies that have seen significant gains over the past few years.

But there is a growth story behind it . As you know, we talk about the importance of looking beyond the stock price. It is true that evaluation is important, but what is more important is to look at the underlying growth story to see if that evaluation is justified.

I believe these three companies already have strong justifications for their growth over the next three to five years. That's precisely why we wanted to talk about it today. We don't want to talk about stocks that we don't believe have sustainable growth stories.

I believe these companies still have great opportunities for growth.