Micron Capex Is Going Up, Not Down — The Only Question Is Whether It's Margin-Accretive HBM or a Classic Memory Overbuild
MU's own materials say FY26 capex is now above $25B and FY27 steps up meaningfully, with over $10B more construction spend year-over-year. Near term that's not bearish — it's proof supply is tight. Medium term it becomes the bear case the moment gross margin stops expanding with it. My framework for Wednesday's print: capex up + GM guide up = bullish; capex up + GM guide flat/down = sell-the-news.
The question I am getting most this week is whether Micron is about to telegraph a capex cut on Wednesday. The answer, on the public evidence, is no. Capex is going up, not down. FY26 was raised to above $25B. FY27 is expected to step up meaningfully on top of that. The 10-Q says the same thing in formal language. There is no signal yet that they are pulling back.
That doesn't make this print bearish. The better question is what kind of capex this is — margin-accretive HBM and advanced-DRAM spend, or the early shape of a classic memory-cycle overbuild. The trade is not 'capex up = sell.' The trade is: capex up + gross margin guide up = bullish. Capex up + gross margin guide flat or down = sell-the-news. That's the whole framework. Everything below is how I get there.
This essay reflects the personal views and opinions of Guy Gentile and is published for informational and educational purposes only. It is not investment advice, a recommendation to buy or sell any security, an offer or solicitation, or a research report. Markets carry risk and any positions, setups, or names discussed may change without notice. Mr. Gentile and parties affiliated with him may hold, add to, reduce, or close positions in the securities discussed at any time. Do your own research and consult a licensed financial professional before making investment decisions. Past performance is not indicative of future results.
Premarket notes, trade setups, and op-eds — free, in your inbox. Read more →