Micron surges on revenue upgrade but AI stocks still getting dumped — catch-up t
Thesis
Micron just skyrocketed on a revenue upgrade that suggests fundamental demand for AI memory is accelerating — yet the stock is being dragged down in a indiscriminate tech sell-off alongside Nvidia and Sandisk. Palantir's 30% monthly decline despite being an AI beneficiary shows the market is punishing AI stocks on sentiment, not fundamentals. When a company's business outlook improves dramatically but its stock falls due to market-wide de-risking, the gap between price and fundamentals eventually closes. Micron is the clearest example: analysts are raising targets while the stock drops, creating a value gap that should snap back once the panic subsides.
Strategy approach
Build a divergence strategy on MU. Track the spread between MU's forward revenue estimate revisions and its stock price. Enter long MU when the stock falls 5%+ over 5 sessions while analyst consensus revenue estimates for the next quarter are revised upward by 10%+ (positive estimate revision divergence). Hold 15 trading days. Exit on 8% gain or 5% loss.