Micron proves AI memory demand is real, but tech is selling off anyway — buy the
Thesis
Micron's blowout quarter (revenue quadrupling to $41B) and $100B in locked-in AI memory demand fundamentally validates the memory chip cycle. Yet the very next day, Investor's Business Daily reports a broad tech sell-off dragging Micron, Nvidia, and SanDisk down with it. The key divergence: Apple is raising Mac and iPad prices specifically because of rising memory costs (per CNBC), which is direct real-world confirmation that Micron's pricing power is flowing through the economy. Meanwhile Microsoft's selloff on spending fears is dragging the entire AI sentiment down. When a company with Micron's fundamentals gets dragged down 8%+ in a sector-wide panic that has nothing to do with its actual business, the gap between price and reality creates a buy-the-dip setup.
Strategy approach
Build a mean-reversion / value-dip strategy that enters long MU when the stock has declined 8% over 3 trading days while the SOX semiconductor index has declined more than 5%. Require that MU's 14-day RSI drops below 40 as an entry condition. Set a profit target at the 20-day simple moving average and a hard stop loss at 7% below entry. Maximum hold time of 15 trading days.