Micron reports Q4 today: Why Lynx Equity sees massive upside

Investing.com -- Lynx Equity Strategies is positioning long on Micron Technology (NASDAQ: MU) ahead of the company's highly anticipated fiscal fourth-quarter earnings report, scheduled for release today after the market close. Alongside its Q4 results, Micron will provide critical quarterly guidance that investors are closely watching to gauge the longevity of the AI-driven memory boom.

Lynx analyst KC Rajkumar is projecting a massive revenue path for the semiconductor giant, forecasting top-line sales to reach $525 billion in calendar year 2028 with 80% gross margins, underpinning a decidedly bullish stance.

Rajkumar's core thesis centers on a structural shift that he argues the broader Street has missed. “Few on the Street made the connection that MU is a beneficiary of Meta's Muse agentic workloads,” he wrote in a preview note. The argument asserts that AI workloads are migrating away from token generation on GPU and XPU hardware toward longer-running agentic tasks executed on CPUs. This transition is pulling the dominant memory type along with it.

“Over the past few months, the tip of the memory spear has moved from GPU-attached HBM to CPU-attached lpDDR5x as the center of gravity of AI workloads moves from token generation on GPU/XPU to agentic workloads on CPUs,” Rajkumar explained. “Blending in LP-memory puts upward pressure on overall ASP.”

On the supply side, Lynx identifies a second market misread. “We think industry giant Samsung has chosen to prioritize elevated profitability over market share, choosing to maintain tight supply even as demand visibility from data centers extends into 2029/2030,” Rajkumar wrote. “This reduces the possibility of a supply glut in 2028/29, a key worry for investors.” The prevailing bearish concern heading into today's print is that pricing pressure will mount as DRAM supply loosens in 2028. Rajkumar’s read on Samsung’s behavior directly undercuts this narrative.

The firm maintains its $1,325 price target on Micron but explicitly notes that this figure understates its true conviction. “We maintain our $1325 PT set a few months ago. However, our view has strengthened since then. We believe there is significant upside to our target and our estimates,” the note states.

Reflecting this extreme mega-bull thesis, Lynx models CY27 revenue at approximately $350 billion with an 85% gross margin, yielding roughly $250 in earnings per share (EPS)—representing an estimated 95% year-over-year revenue growth. The firm's CY28 forecast of $525 billion in revenue, an 80% gross margin, and $325 in EPS implies an additional 50% top-line expansion. While these figures sit substantially above the higher end of current Wall Street consensus estimates, they illustrate the firm's belief in a historic margin expansion cycle.

This aggressive positioning marks a deliberate reversal from Lynx’s stance just three months ago. “Three months ago, going into Micron's May quarter earnings call we decided to stay on the sidelines due to investor complacency and elevated volatility. Not so this time. We are Long into the August quarter earnings event today,” Rajkumar wrote. Investor nervousness has replaced the complacency that made the previous quarter a riskier entry, creating what Lynx describes as a more favorable sentiment setup.

“The AI industry is in the very early innings of the agentic revolution,” Rajkumar added. “With the potential for long-running agents to become commonplace, extending from AI developers to billions of retail consumers, we think the potential for an extended period of strong double-digit percentage annual revenue growth, along with 80+% gross margin is being underestimated.”

For the near term, Lynx has two specific expectations from management on today's call: an extension of demand visibility and explicit confirmation that the supply/demand imbalance will persist into 2028 and beyond.

“We are long into the print with the expectation that management extends demand visibility and expects the supply/demand imbalance to persist into 2028 and beyond,” Rajkumar concluded. He noted that today's earnings call is “likely to be a catalyst for the stock to make fresh highs.” If management delivers strong guidance on either front, the $1,325 price target—which Lynx already views as a floor—could become the next near-term waypoint for MU shareholders.

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